F 

1235 

.ci 


- 


ESSAY  ON  THE 

RECONSTRUCTION 

OF  MEXICO 


By 


Manuel  Calero 
Francisco  S.  Carvajal 
Juan  B.  Castelazo 
Toribio  Esquivel  Obregon 
Jesus  Flores  Magon 
Tomds  Macmanus 
Rafael  Martinez  Carrillo 
Miguel  Ruelas 
Jorge  Vera  Estanol 


DE    LAISNE    &-    CARRANZA,    Inc 

TWO  DUANE  STREET  .  :  ;  :        NEW  YORK 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

Microsoft  Corporation 


http://www.archive.org/details/essayonreconstruOOcalerich 


ESSAY  ON  THE 

RECONSTRUCTION 

OF  MEXICO 


By 


Manuel  Calero 
Francisco  S.  Carvajal 
Juan  B.  Castelazo 
Toribio  Esquivel  Obregon 
Jesus  Flores  Magon 
Tomds  Macmanus 
Rafael  Martinez   Carrillo 
Miguel  Ruelas 
Jorge  Vera  Estanol 


DE     LAISNE     &-    CARRANZA,     Inc. 

TWO  DUANE  STREET        :  .  ;  :         NEW  YORK 


F  12. 3.  £ 


Bancroft  Library 


Translated  by 
H.  N.  BRANCH 

Translator  of  the  Mexican  Constitution  of  1917,  etc 


CONTENTS 


PAGES 

Foreword  to  the  English  edition 7 

To   our  Fellow   Citizens 9 

I.  Measures  suitable  to  make  democracy  effective  in  Mexico _...  IS 

Recommendations    _ 18 

II.  Checks  and  balances  of  the  branches  of  Government.    Impeachment 

of  Officials.     Methods  of  substituting  the  President 21 

Recommendations    : „ 24 

III.  Foreign    Affairs    27 

Recommendations    28 

IV.  The  Naturalization  and  Civil  Status  of  Aliens 31 

Recommendations    34 

V.  Municipal   Autonomy  35 

Recommendations    37 

VI.  Education     .• 39 

Recommendations   41 

VII.  Administration    of   Justice 43 

Recommendations 45 

VIII.  Railroad    Policy   47 

Recommendations    49 

IX.  National   Army    51 

Recommendations 54 

X.  Labor   Legislation    57 

Recommendations    _ ._ 59 

XL        Responsibilities  Growing  out  of  Disorders  in  Mexico 61 

Recommendations    63 

XII.  Public    Health    65 

Recommendations    67 

XIII.  Development  of  our  National   Resources. 69 

Recommendations   77 

XIV.  Economic  and  Financial   Problems 81 

Recommendations    . 93 

XV.  The  Agricultural  Problem  97 

Recommendations   105 


FOREWORD  TO  THE  ENGLISH  EDITION 


rHE  ESSAY  here  presented  to  the  English-speaking  community  embodies 
a  message  from  certain  Mexican  citizens  to  the  Mexican  people  as  a  whole. 
For  this  reason,  although  originally  published  in  the  United  States,  it  was 
written  and  printed  in  Spanish.  Since  its  appearance,  however,  the  press  notices 
it  has  received  have  led  to  requests  from  many  sources  for  an  English  version. 
Accordingly,  the  authors  determined  to  issue  the  present  edition. 

This  exposition,  summary  as  it  is,  gives  an  idea  of  the  problems  with 
which  the  Mexican  people  must  contend  in  any  attempt  at  the  rehabilitation  of 
their  country.  The  authors  do  not  pretend  to  have  embraced  all  of  these  problems, 
but  they  do  sincerely  believe  that  those  discussed  are  the  most  pressing  and 
important. 

The  Essay  was  written  during  the  provisional  government  preceding  that  of 
General  Obregon.  Therefore,  when  the  authors  refer  to  the  "present  government 
of  Mexico  "  or  use  a  like  expression,  they  refer  to  the  government  of  provisional 
President  de  la  Huerta.  The  problems  that  existed  during  the  latter's  administra- 
tion are,  however,  the  same  as  those  with  which  President  Obregon's  government 
is  confronted,  though  in  many  respects  they  now  assume  an  even  graver  aspect. 

The  names  of  the  collaborators  are  arranged  alphabetically,  in  accordance  with 
the  rules  of  arrangement  of  names  in  Spanish.  It  is  believed  that  a  brief  statement 
of  the  professions  and  of  the  more  important  public  offices  formerly  held  by  the 
authors  in  Mexico  may  be  of  some  interest  to  the  American  reader...  The  follow- 
ing enumeration  covers  this  point: — 

Manuel  Calero.  —  Lawyer,  Member   of  the   Chamber   of   Deputies, 

Senator,    Secretary    of    Justice,    Secretary    of    Foreign    Affairs, 

Ambassador  to  the  United  States. 
Francisco  S.  Carvajal.  —  Lawyer,  Senator,  Chief  Justice  of  the  Federal 

Supreme  Court,  Provisional  President  of  the  Republic. 
Juan  B.  Castelazo.  —  Lawyer,  Governor  of  the  State  of  Guanajuato, 

Mexican  Consul  General  in  France. 
Toribio  Esquivel  Obregon.  —  Lawyer,  Secretary  of  the  Treasury. 
Jesus  Flores  Magon.  —  Lawyer,  Senator,  Assistant  Secretary  of  Justice, 

Secretary  of  Gobernacion. 

Tomas  Macmanus.  —  Banker,  Member  of  the  Chamber  of  Deputies, 
Senator. 

Rafael  Martinez   Carrillo.  —  Lawyer,   Senator,   Assistant    Secretary 

of  Gobernacion. 
Miguel  Ruelas.  —  General  of  Brigade  in  the  former  Regular  Army, 

Director  General  of  Military  Education,  Second  Assistant  Secretary 

of  War. 

Jorge  Vera  Estanol.  —  Lawyer,  Member  of  the  Chamber  of  Deputies, 
Secretary  of  Public  Instruction. 


TO  OUR  FELLOW-CITIZENS 


FOR  MANY  long  years,  through  the  bitterness  of  the  partisan 
governments  dominating  Mexico,  those  who  sign  this  document 
have  been  compelled  to  live  in  exile,  deprived  of  the  rights  of 
citizenship  and  even  of  the  civil  rights  which  the  laws  of  Mexico  ac- 
cord to  aliens;  but  as  no  government  could  rob  us  of  our  love  for  the 
land  that  gave  us  birth,  nor  destroy  in  us  the  consciousness  of  our  duty 
toward  our  country,  we  determined  to  unite  our  efforts  with  a  view  to 
examine  the  fundamental  problems  of  the  Mexican  situation  and  to 
offer  to  our  fellow-citizens  the  result  of  our  study.  If  we  can  thereby 
contribute,  in  some  degree,  to  alleviate  the  domestic  distress  of  our 
country  and  to  avert  the  international  dangers  which  threaten  her 
sovereignty,  we  shall  be  amply  paid. 

The  essay  on  the  reconstruction  of  Mexico  now  made  public  was 
drafted,  in  its  essential  points,  during  the  last  months  of  the  Carranza 
administration.  The  recent  change  in  the  personnel  of  the  government 
is  no  reason  why  we  should  desist  from  our  task;  rather  are  we  of  the 
opinion  that  the  present  moment  is  even  more  propitious  to  our  dis- 
interested efforts.  However  small  our  experience  in  public  matters, 
the  program  we  submit  has,  in  the  first  place,  the  advantage  of  being 
inspired  in  a  spirit  of  compromise  between  the  teachings  of  pure  theory 
on  which  our  system  of  government  is  based,  and  the  limitations  and 
shortcomings  of  the  Mexican  people.  We  have  not  sought  to  formulate 
a  program  of  Utopian  recommendations,  but  a  series  of  applications  of 
scientific  principles  to  the  practical  realities  of  Mexican  life.  This 
means  that  we  do  not  interpret  politics  as  a  science  discovering  and 
formulating  laws,  but  as  the  very  difficult  art  which,  with  due  regard 
for  such  laws,  studies  national  forces  and  the  method  of  harmonizing 
them,  so  that,  instead  of  destroying  one  another  in  perpetual  conflict, 
they  may  be  combined  and  cooperate  to  the  advancement  of  the  Nation. 

Nor  is  it  a  revolutionary  plan  that  we  have  written,  false  panacea 
to  which  the  disgruntled  and  the  ambitious  ever  resort  in  Mexico.  We 
deem  our  work  a  program  of  national  salvation.  Withdrawn  as  we  are 
from  active  political  life  and  without  the  possibility  of  intervening  there- 
in, and  living  outside  the  country,  we  address  those  who  can  translate 


—  10  — 

our  ideas  into  deeds,  if  after  careful  study  they  find  them  satisfactory 
and  practicable. 

We  are  not  unaware  of  the  fact  that  the  jaith  of  some  of  our  fellow- 
men  in  the  capacity  of  the  Mexicans  to  redeem  themselves  by  their 
own  efforts  is  beginning  to  fail  and  falter;  nor  are  we  oblivious  of  the 
existence  among  foreigners  of  the  belief  that,  without  outside  aid,  we 
cannot  be  saved.  We  still  have  faith  in  the  virtues  of  the  Mexican 
people,  and  believe  that  if  their  activities  are  guided  along  the  proper 
path,  they  can,  alone,  set  up  a  regime  of  law  which  shall  be  a  sure 
guarantee  of  progress  and  a  firm  foundation  upon  which  to  reconquer 
the  respect  of  the  world. 

Those  of  our  fellow-citizens  who  are  familiar  with  our  antecedents 
will  see  how  we  have  begun  by  sacrificing  our  former  political  differences 
to  the  exigency  of  national  interests.  Some  of  us,  moved  by  the  same 
lofty  purpose,  have  also  sacrificed  favorite  theories  sustained  in  public 
office,  or  defended  in  the  press  and  in  the  forum.  All  of  these  sacrifices, 
which  possibly  expose  those  making  them  to  the  charge  of  inconstancy, 
are  imperative  requirements  of  the  purpose  animating  us.  Today  we 
are  united,  and  our  efforts  are  combined  under  the  guidance  of  a 
superior  and  sacred  aspiration,  compelling  our  gaze  only  to  the  future 
with  no  time  to  glance  backward  to  the  dismal  days  of  the  past,  unless 
it  be  to  draw  from  them  the  lessons  of  experience,  and  so  justify  our 
present  position. 

Before  submitting  the  various  portions  of  the  program  which,  in 
our  judgment,  the  Mexican  Government  should  follow  in  laboring  for 
the  reconstruction  of  Mexico,  we  must  set  down  as  a  fundamental 
observation  that  neither  the  most  conscientious  surveys  nor  the  wisest 
laws  can  solve  our  social  problems,  unless  the  work  be  done  on  the 
solid  foundation  of  the  integrity  of  those  in  authority.  Without  this, 
every  effort  would  be  futile. 

If  now  we  consider  the  method  followed  in  our  work,  we  must  state 
that  we  regard  it  as  essential,  at  the  outset,  in  considering  the  re- 
construction of  Mexico,  to  fix  its  general  lines,  and  the  end  which 
Mexican  statesmen  ought  to  have  in  view.  Many  disinterested  and 
intelligent  efforts  have  been  wasted  through  a  lack  of  method;  and  the 
policy  of  our  government  has  been  at  the  mercy  of  the  capricious 
influence  of  individuals  or  of  the  exigencies  of  each  new  day. 

In  dealing  with  the  problem  of  reconstruction,  it  would  be  a  vital 
error  to  regard  Mexico  as  an  industrial  country.     Its  present  stage  of 


—  11  — 

development  is  not  the  industrial  stage.  Nor  is  it  our  judgment  that 
preference  should  be  paid  to  the  mining  industry,  despite  the  prominence 
that  this  branch  of  economic  activity  has  attained  in  Mexico.  What 
is  of  capital  importance,  quite  fundamental  in  fact,  —  and  this  seems 
to  us  axiomatic,  —  is  to  guarantee  an  adequate  and  nourishing  food- 
supply  for  the  people.  Mexico  is  an  agricultural  country,  capable  of 
great  agricultural  development;  and  yet,  by  a  lamentable  paradox,  its 
population  is  inadequately  fed,  because  the  soil  does  not  yield  enough 
for  their  sustenance.  This  condition  reveals  the  existence  of  an 
economic-social  problem  of  grave  character,  which  points  the  way  to 
the  principle  that  must  be  paramount  in  any  program  of  reconstruc- 
tion; only  by  frankly  recognizing  it,  can  we  hope  to  have  a  national 
economic  policy,  a  regime  of  our  own,  drawn  from  our  own  experience 
and  adapted  to  the  essential  conditions  of  our  own  life. 

From  the  strictly  political  point  of  view,  we  believe  that  a  pre- 
requisite to  the  carrying  out  of  a  program  of  national  reconstruction 
is  the  restoration  of  the  constitution  of  1857.  Apart  from  its  historic 
value  and  its  intrinsic  merits  {broad  and  great  enought  to  guarantee 
the  most  progressive  program),  the  constitution  of  1857  has  the  supreme 
virtue  of  having  been  recognized  by  the  whole  people  as  the  national 
constitution.  Its  restoration  as  the  supreme  law  of  Mexico  would 
eliminate  the  protests  now  made,  and  which  will  continue  to  be  made 
throughout  the  republic,  against  the  imposition  of  the  constitution  of 
1917  by  the  Carranza  revolutionists,  in  violation  of  their  most  solemn 
pledges. 

Neverthless,  the  constitution  of  1857  is  not  an  immutable  law; 
nor  do  we  believe  that  all  its  precepts  respond  to  the  admitted  demands 
of  progressive  thought.  Experience  has  shown  the  expediency,  —  the 
urgency  we  might  say,  —  of  introducing  several  amendments ;  but  in 
order  that  they  may  have  the  same  sanctity  as  the  constitution  itself, 
they  should  be  effected  by  constitutional  means,  that  is  to  sav, 
through  the  action  of  the  federal  congress  and  a  majority  of  the  state 
legislatures.  Any  other  process  is  to  be  rejected  as  illegal  —  no  less 
illegal  than  the  meeting  of  the  so-called  Constitutional  Convention 
which  framed  the  constitution  of  191 7. 

A  return  to  constitutional  order,  to  a  status  of  legality  accepted 
by  all  (even  by  those  who  have  sought  to  subvert  it),  would  amount 
to  the  elimination  of  the  first  cause  of  discord  among  the  Mexican  people. 
The  men  who  are  today  in  control  in  Mexico  should  convince  them- 


—  12  — 

selves  that  respect  for  legal  tradition  is  the  most  powerful  tie  in 
maintaining  the  cohesion  oj  a  social  group  that  is  not  yet  definitely 
integrated. 

In  recommending  the  restoration  oj  the  constitution  of  1857,  we 
do  not  mean  that  the  present  Mexican  Government  should  be  over- 
thrown through  a  fresh  revolution.  Should  the  government  itself  find 
the  means  of  realizing  this  salutary  measure,  the  main  purpose  we  seek 
would  be  attained.  We  are  indifferent  as  to  the  method  chosen  to 
restore  the  legitimate  constitution,  inasmuch  as  there  is  no  law  to 
prescribe  it  or  even  point  the  way;  but  we  shall  condemn  the  use  of 
force,  so  long  as  there  exist  other  means  to  attain  the  desired  end. 

Much  capital  has  been  made  of  the  statement  that  the  constitution 
of  1Q17  marks  a  great  step  forward  for  the  Mexican  people,  with  the 
corollary  implication  that  the  restoration  of  the  constitution  of  1857 
would  be  a  step  backward,  a  reactionary  step.  This  concept  is  false, 
as  we  shall  readily  show  in  the  course  of  this  study.  Nay  more;  taken 
in  its  entirety  the  constitution  oj  1Q17  is  less  liberal  than  that  of  1857, 
while  certain  of  its  precepts  embody  the  most  intolerable  tyranny,  and 
even  the  subversion  of  principles  essential  to  any  regime  oj  democratic 
freedom. 

In  support  of  this  statement,  we  may  point  to  the  fact  that  the 
constitution  of  1Q17  sanctions,  as  a  legal  institution,  the  dictatorship 
of  the  executive  branch  by  making  the  President  virtually  non-impeach- 
able,  and  by  reducing  the  sessions  of  Congress  to  barely  four  months 
a  year.  During  this  term,  Congress  must  devote  its  attention  preferably 
to  the  enactment  of  tax  measures,  to  passing  the  budget  and  to  auditing 
the  accounts  of  the  executive  branch.  Such  a  task  leaves  Congress  no 
freedom  of  action,  unless  to  the  prejudice  of  these  fundamental  duties. 
On  the  expiration  of  these  four  months,  Congress  cannot  junction  unless 
called  into  extraordinary  session  by  the  President,  when  its  legislative 
sphere  is  limited  to  the  matters  specified  in  the  call.  A  congress  thus 
shackled  cannot  represent  a  jree  people. 

Again,  while  the  constitution  oj  1857  guarantees  full  religious  free- 
dom, that  of  iqi  7  persecutes  all  creeds' and  all  religion.  No  one  would 
dare  to  say  that  this  form  of  tyranny  over  the  conscience  is  an  achieve- 
ment in  the  path  of  liberty. 

So,  too,  the  constitution  of  igi7  mutilates  the  democratic  principle 
of  the  liberty  of  education,  which  is  fully  guaranteed  by  that  of  1857. 

It  has  been  said  that  Article  27  of  the  new  constitution,  which 


—  13  — 

undermines  the  right  of  property,  is  an  achievement.  We  can  neither 
endorse  this  theory,  nor  close  our  eyes  to  the  palpable  fact  that  the 
application  of  this  article  has  only  served  to  work  extortion,  without 
bettering  the  condition  of  the  masses  who  continue  sunk  in  age-long 
squalor  and  poverty. 

We  shall  point  out,  in  the  course  of  our  study,  other  innovations 
of  the  constitution  of  1917,  which  constitute  lamentable  retrogression, 
as  we  shall,  with  no  less  impartiality,  note  in  what  respects  the  later 
instrument  excels  that  of  1857.  Were  we  to  admit,  however,  that  the 
new  code  is  as  a  document  superior  to  the  former  constitution,  not 
even  then  would  we  declare  ourselves  in  favor  of  it,  for  we  cannot  fail 
to  take  into  account  the  fact  that  our  people,  like  all  peoples,  is  subject 
to  historical  and  social  forces  of  the  sort  which  no  statesman  can  afford 
to  overlook  if  his  work  is  to  endure.  One  of  these  forces  is  that  of 
Law,  which  builds  the  framework  of  the  political  structure  of  a  people 
throughout  its  history.  Until  such  time  as  a  social  convulsion  shall 
break  this  framework,  —  as  the  French  Revolution  shattered  that  of 
an  older  order,  —  it  must  be  preserved,  if  for  no  other  reason  than  to 
prevent  the  establishment  of  the  fatal  precedent,  which  seemed  to  have 
been  forgotten  in  Mexico,  that  every  change  of  rulers  can  bring  a  new 
constitution,  thereby  sowing  ineradicable  seeds  of  discord.  The  only 
thing  that  the  revolutionists  might  properly  have  done  was  the  modifica- 
tion of  those  provisions  of  the  constitution  of  1857  which  they  deemed 
incompatible  with  the  doctrines  or  pet  theories  of  their  revolution.  Had 
they  thus  proceeded,  they  would  have  satisfied  their  program  of  in- 
novations, without  wounding  public  sentiment,  nor  furnishing  fuel  for 
future  revolts,  which  will  at  any  moment  have  the  same  justification 
as  the  movement  initiated  by  the  Plan  of  Guadalupe,  namely,  the 
restoration  of  the  constitution. 

What  force  can  be  given  to  the  constitution  enacted  at  Queretaro 
by  the  provision  of  its  Article  136  which  prescribes  that  the  very  same 
constitution  shall  not  lose  its  force  and  vigor  even  though  its  observance 
be  interrupted  by  rebellion?  An  identical  provision  exists  in  Article  128 
of  the  constitution  of  1857.  Yet  this  did  not  prevent  Senor  Carranza 
and  his  partisans  from  supplanting  by  another  the  very  constitution 
for  whose  restoration  they  were  fighting.  By  this  attack  on  the  legal 
principle  that  the  constitution  is  one  and  insubvertible,  although  sub- 
ject to  amendment,  those  who  called  themselves  "constitutionalists" 
in  advance  made  impossible  any  efficacy  in  their  own  constitution  and 


—  14  — 

destroyed  all  the  force  of  the  precept  of  its  Article  136  which  they 
themselves  had  failed  to  respect. 

In  a  word,  we  doubt  the  effectiveness  of  any  constructive  labor  in 
Mexico  without-  the  vindication  of  the  principle  of  legality,  the  only 
means  of  averting  the  anarchical  tendencies  of  those  who  dream  of, 
attaining  the  triumph  of  social  justice  by  the  destruction  of  society 
itself.  Legality,  represented  by  a  constitution  historically  sanctioned 
and  wholly  identified  with  our  justly -earned  glories,  will  be  the  sole 
beacon  to  the  Mexican  people  in  the  midst  of  the  storm  of  passions 
and  conflicting  principles  which  now  engulfs  the  world.  The  constitu- 
tion of  1857  opens  the  doors  to  social  progress  in  every  respect,  and  is 
susceptible  to  far-reaching  amendment,  which  would  insure  real  pro- 
gress for  the  people,  as  we  hope  to  show  in  the  course  of  this  study. 

Having  stated  our  purposes,  we  shall  proceed  to  analyze  them  in 
the  chapters  of  the  following  program. 

New  York  City,  September,  1920. 


MEASURES    SUITABLE    TO    MAKE    DEMOCRACY 
EFFECTIVE    IN    MEXICO 

IT  IS  NOT  to  be  gainsaid  that  with  all  the  disastrous  effects 
of  the  convulsions  that  have  shaken  Mexico  for  the  last  ten 
years,  certain  results  quite  beneficial  to  our  political  advance- 
ment have  been  attained.  Among  others,  we  must  not  overlook 
the  full  realization  by  the  people  of  the  fundamental  concept 
of  sovereignty  in  a  democratic  government.  Civic  duties,  which 
for  so  many  years  had  seemed  dead  or  forgotten,  are  taking 
root  more  and  more  in  the  public  mind;  and  the  people  have 
begun  to  realize,  as  the  fruit  of  bitter  experience,  that  only  by 
the  unflinching  fulfillment  of  those  duties  which  a  democracy 
imposes  on  each  citizen,  can  the  Republic  be  freed  from  tyrannies 
which  degrade,  or  anarchical  convulsions  which  destroy. 

Nevertheless,  we  are  far  from  priding  ourselves  upon  the 
establishment  of  democracy  in  Mexico;  and  we  would  be  guilty 
of  lack  of  sincerity  if  we  were  to  say  that  the  government  that 
brought  about  the  so-called  constitutionalist  revolution  was  a 
regime  where  liberty  and  justice  ruled,  in  other  words,  a  demo- 
cratic government.  Had  this  been  the  case,  we  should  never  have 
thought  of  offering,  from  exile,  our  feeble  contribution  to  rescue 
the  Republic  from  the  terrible  dilemma  to  which  the  Carranza 
Government  was  dragging  it:  disintegration  in  a  whirl  of  disorder 
and  immorality,  or  a  collapse  into  foreign  hands  which,  at  the  cost 
of  our  sovereignty,  would  redeem  us  from  our  own  helplessness. 

And  yet,  it  is  with  a  feeling  of  sadness,  that  we  record  the 
fact  that  the  disappearance  of  the  Carranza  administration  has 
not  made,  as  if  by  magic  gesture,  a  radical  and  definitive  change 
in  the  government  of  Mexico.  However  much  of  an  effort  may 
be  made  to  prove  that  the  revolution  which  overturned  Carranza 
was  inspired  by  lofty  and  legitimate  purposes,  and  the  motives 
of  those  who  seized  the  reins  of  government  disinterested,  —  and 
we  admit  this  fact  without  qualification,  as  to  certain  of  its 
members,  —  there  is  still  a  formidable  barrier  to  the  un- 
encumbered progress  of  our  political  development,  which  is 
not  surmounted  by  the  mere  substitution  of  a  new  governmental 


—  16  — 

personnel,  even  though  the  new  men  are  animated  by  a  genuine 
intention  to  respect  popular  liberties.  This  obstacle  is  the 
appalling  illiteracy  of  four-fifths  of  the  Mexican  people. 

A  people  whose  vast  majority  is  wholly  illiterate,  a  people 
which  does  not  read  because  it  cannot  read,  a  people  in  part 
consisting  of  groups  speaking  only  their  native  tongues,  is  not 
the  demos  that  a  system  of  popular  government  requires  and, 
indeed,  takes  for  granted.  This  situation  is  not  peculiar  to 
Mexico;  it  occurs  throughout  the  nations  of  Spanish  America  in 
which  the  classical  despotisms  of  the  American  continent  have 
flourished.  By  the  side  of  a  substantial  group,  well  qualified  to 
comply  with  the  obligations  imposed  by  democracy,  there  are 
in  Mexico  twelve  million  human  beings  in  the  lamentable  state 
of  backwardness  we  have  just  described.  Our  professional 
politicians  lack  the  necessary  moral  courage  to  admit  that  these 
twelve  millions  must  be  transformed  by  education  before  they 
can  be  called  upon  to  exercise  their  civic  duties,  and  choose 
rather  to  endorse  the  conventional  allegation  that  all  Mexicans 
are  fitted  for  self-government.  This  attitude  should  be  attributed 
not  so  much  to  a  fanatic  regard  for  the  democratic  principle  of 
universal  political  equality,  but  to  a  desire  to  flatter  the  masses 
by  references  to  their  rights,  and  then  use  them  to  furnish  the 
brute  force  with  which  the  government  can  be  seized  by  violence, 
and  retained  by  terrorism. 

The  "constitutionalist"  revolution,  like  every  other  revolu- 
tion in  Mexico,  promised  us  the  reign  of  liberty;  but  the  Carranza 
regime  fell  far  short  of  fulfilling  its  promises  of  liberty,  even 
though  it  could  not  wholly  stay  the  political  progress  of  the 
Mexican  people.  We  should  say  on  its  behalf  that  no  govern- 
ment, however  well  disposed,  can  fulfil  such  promises  in  Mexico, 
so  long  as  the  people  do  not  do  their  part.  When  governments 
in  Mexico  respect  liberty,  it  takes  on  the  form  of  anarchy  under 
the  influence  exercised  over  the  masses  by  nefarious  agitators; 
and  then  the  governments,  facing  the  danger  that  society  may 
be  engulfed  by  anarchy,  restrain  liberty,  and  finally  fall  into 
the  opposite  extreme  —  despotism.  If  democracy,  with  universal 
suffrage,  were  practicable  in  Mexico,  the  movement  that  over- 
threw Carranza  would  have  had  no  possible  justification.  Ca- 
rranza sought  to  impose  his  will  regarding  the  election  of  his 
successor  in  the  chief  magistracy.  Could  he  have  achieved 
this  end,  if  the  people  fully  grasped  the  significance  of  their 
political  rights?    What  fear  could  the  other  presidential  caridi- 


—  17  — 

dates  have  entertained,  if  the  people  were  really  to  decide  the 
election  by  their  ballots?  In  countries  where  the  people  act 
through  the  force  of  public  opinion  and  the  ballot,  —  and  these 
are  always  the  countries  in  which  illiterate  citizens  form  an  insignificant 
minority,  —  it  is  unnecessary  to  appeal  to  violence  to  prevent 
electoral  impositions.  The  mere  mention  of  such  fraud  in  these 
circumstances  is  a  paradox.  In  any  event,  the  people  protest  of 
their  own  accord,  and  do  not  need  nor  tolerate  that  the  army 
should  become  the  interpreter  of  its  will.  The  Republic  of  the 
United  States  has  never  known  an  instance  where  the  army,  in 
defense  of  popular  rights  which  have  been  violated,  has  over- 
thrown a  government  and  set  up  another  in  its  place.  In  Hispano- 
America,  with  two  or  three  relatively  recent  exceptions,  the 
army  makes  and  unmakes  governments,  and  the  popular  vote 
merely  serves  to  ratify  the  violent  acts  of  military  chiefs. 

We  are  ready  to  admit  that  the  last  movement  in  Mexico 
was  in  part  provoked  by  Carranza  himself  in  illegally  persecuting 
the  most  conspicuous  among  the  presidential  candidates;  but 
were  the  people  the  decisive  factor  in  electoral  contests,  neither 
would  Carranza  have  dared  to  engage  in  this  persecution,  nor 
would  the  persecuted  candidate  have  witnessed  the  practical 
wholesale  defection  of  the  army  to  his  cause.  Pretorian  armies 
exist  only  in  those  countries  where  liberty  is  not  held  by  the 
people  as  a  precious  and  inviolable  patrimony. 

The  only  excuse,  the  sole  plausible  explanation  that  can 
be  given  to  the  latest  political  movement  in  Mexico,  is  that  which 
its  initiators  and  beneficiaries  do  not  dare  to  state,  namely,  that 
the  great  mass  of  citizens,  by  reason  of  their  own  impotence, 
were  obliged  to  remain  inactive  while  others  officiously  defended 
their  possession  of  the  fundamental  civic  rights  which  Carranza 
sought  to  violate.  When  a  people  is  in  such  a  case,  democracy 
becomes  a  fiction  and  cannot  be  said  to  exist. 

We  are  convinced  that  those  who  attain  power  under  the  role 
of  "champions  of  the  people's  rights"  cannot  honestly  admit 
our  true  condition.  The  adult  illiterate  must  be  educated,  or  at 
least  afforded  every  facility  to  rise  from  his  abject  condition; 
the  Indian  who  can  only  speak  his  vernacular  tongue  most  be 
taught  to  speak,  read  and  write  the  national  language  —  Spanish. 
Until  these  results  are  attained,  the  illiterate  should  be  kept  in 
a  state  of  political  minority,  which  will  automatically  end  the 
day  that  he  acquires  that  elementary  knowledge  which  the  law 
should  demand  for  the  exercise  of  civic  rights.   The  government, 


—  18  — 

on  the  one  hand,  the  cultured  classes,  on  the  other,  and,  in 
general,  all  citizens  who  love  their  country  and  are  interested  in 
its  progress,  should  leave  no  stone  unturned  to  efface,  as  rapidly 
as  possible,  the  widespread  stain  of  illiteracy.  One  of  the 
chapters  of  the  present  program  is  devoted  to  this  subject. 
Considering  the  question  now  solely  from  the  political  point  of 
view,  we  hold  that  the  most  radical  measure,  the  most  progres- 
sive and  the  most  democratic,  that  a  party  seriously  engaged  in 
the  reconstruction  of  Mexico  can  adopt  is  to  restrict  the  ballot 
to  those  who,  in  fact,  know  how  to  use  it. 

Although  at  the  moment  of  decisive  action  our  politicians 
show  their  profound  distrust  of  the  people,  —  we  have  indicated 
that  the  overthrow  of  the  Carranza  Government  was  a  mani- 
festation of  this  distrust,  —  they  do  not,  however,  seem  resolved 
to  abandon  the  false  theory  that  it  is  a  duty  to  render  homage 
to  ignorance  and  incompetency.  It  is  common  knowledge  that 
the  section  of  the  electorate  which  may  be  regarded  as  qualified 
to  vote  abstains  from  doing  so  because  they  know  that  their  bal- 
lots are  overwhelmed  by  the  mass  of  votes  of  the  illiterate;  and  it 
is  common  knowledge,  too,  that  these  are  cast  recklessly  and 
irresponsibly,  or  manipulated  by  unscrupulous  politicians.  We 
thus  deprive  the  population  of  its  best  elements,  as  well  as  its 
fittest  directors,  and  we  stifle  civic  spirit  in  the  very  groups 
which  ought  to  be  the  bulwark  of  our  institutions.  Consequently, 
the  caste  of  "champions  of  the  people's  rights"  will  continue  to 
flourish  among  us. 

The  government  in  Mexico  which  is  to  follow  the  present 
provisional  government  should  seek  a  basis  of  support  more  in 
keeping  with  the  facts  and  with  the  true  condition  of  our 
democratic  elements.  If  it  fail  to  do  so,  it  will  have  to  be 
satisfied  with  living  a  precarious  existence,  until  it  is  in  turn 
overthrown  by  future  defenders  of  the  rights  of  the  people. 
The  work  of  reconstruction  in  Mexico  will  thus  be  subject  to 
the  hazards  of  fresh  upheavals. 

Our  views  on  the  subject  matter  of  this  chapter  may  be 
summarized  as  follows: 

Bearing  in  mind  that  the  Mexican  people  has  now  begun  to  take 
the  first  step  in  the  exercise  of  self-government,  by  electing,  although 
imperfectly,  its  magistrates  and  by  exercising  the  correlative  rights 
of  petition,  assembly,  organization  for  political  purposes,  and  of  free- 
dom of  speech  and  the  press,  we  believe  that  it  is  a  paramount  duty 
of  each  administration1  to  guarantee  the  exercise  of  these  rights,  to 


—  19  — 

see  that  popular  liberties  are  exercised  in  a  peaceful  and  orderly 
manner,  and  that  the  laws  regulating  the  exercise  of  political  rights 
are  fitted  to  the  condition  of  our  people,  in  order  to  assure  the 
effectiveness  and  sanctity  of  the  ballot. 

We  therefore  deem  it  indispensable  that,  in  federal  and  state 
elections,  the  ballot  be  exercised  only  by  Mexican  citizens  of  more 
than  twenty-one  years  of  age,  of  honest  means  of  livelihood  and  able 
to  read  and  write  the  Spanish  language. 

This  last  condition  is  not  to  be  required  in  municipal  elections  in 
the  case  of  persons  occupied  in  an  industry  or  trade  as  defined  by 
law,  or  owning  real  state  within  the  respective  municipal  area.  * 


*  Note  to  the  English  Edition.  —  We  have  heard  the  opinion  ex- 
pressed that  our  recommendation  with  respect  to  limiting  suffrage  in  Mexico 
may  be  regarded  by  the  American  reader  as  an  undemocratic  measure.  We  are 
satisfied,  however,  that  no  American  conversant  with  our  social  conditions  would 
regard  this  recommendation  other  than  as  a  step  toward  the  establishment  of 
true  democracy  in  Mexico.  Only  those  whose  political  knowledge  is  confined 
to  the  boundaries  of  the  United  States  and  who  for  that  reason  believe  that 
political  standards  prevailing  in  this  country  are  applicable  to  countries  of 
entirely  different  social  and  economic  structure,  will  condemn  our  attitude. 
Such  condemnation   must,  of  necessity,   lack   weight. 

To  us  a  century  seems  long  enough  to  experiment  with  a  system  of  govern- 
ment. During  one  hundred  years  Mexico,  like  other  Spanish-American  countries, 
has  experimented  with  democracy  on  a  basis  of  unrestricted  qualification  for 
the  voter;  and  the  result  has  been  a  continued  failure.  Are  we  not  entitled  to 
try  another  system  more  in  harmony  with  the  scientific  principles  of  the  govern- 
ment of  a  true  democracy? 

With  only  two  exceptions,  revolutions  in  Mexico  have  not  been  revolutions, 
in  the  social  and  historical  sense;  they  have  been  the  bloody,  nay,  demoralizing 
and  destructive  form  in  which  the  personnel  in  power  has  been  replaced.  The 
ballot  is  used  only  to  ratify  and  endorse  the  result  of  an  act  of  violence.  This 
happened  with  Gen.  Porfirio  Diaz;  similar  was  the  procedure  adopted  by  Madero; 
Carranza  followed  the  same  path;  and  Gen.  Obregon  was  forced  to  resort  to  the 
same  method. 

This  experience  is  more  than  enough  to  prove  that  democracy  in  Mexico 
has  not^been  achieved  through  universal  suffrage.  Eighty  per  cent  of  the  citizens 
entitled  to  vote  are  illiterate.  Half  of  this  number  are  Indians  of  whom  a 
considerable  proportion  do  not  even  know  Spanish.  While  in  the  United  States 
out  of  every  one  hundred  electors  only  eight  are  illiterate,  out  of  one  hundred 
Mexican  electors  more  than  eighty  are  illiterate. 

Nor  is  illiteracy  the  only  scourge  of  our  democracy.  There  is  also  the 
misery  prevalent  among  the  great  majority  of  our  people.  Had  we  but  spent 
in  schools  and  in  uplifting  the  masses  sunken  in  poverty  the  countless  millions 
we  have  wasted  in  unwholesome  political  strife!  Instead,  politicians  and  military 
leaders,  while  proclaiming  the  rights  of  the  masses,  have  brutally  used  them  as 
cannon  fodder,  as  the  element  of  force  to  ruin  the  country  in  their  mad  struggles 
for  power. 

Our  five  million  illiterate  Indians,  so  long  as  they  remain  illiterate  will  be 


—  20  — 

incapable  of  understanding  political  issues.  Democracy  has  succeeded  only  where 
the  electorate  has  been  intelligent  and  sufficiently  cultured  to  understand  the 
issues. 

The  accuracy  of  this  principle  has  been  appreciated  by  the  American  people 
in  several  instances.  We  refer  to  the  policy  employed  in  handling  the  American 
Indian  problem  and  the  situations  in  Hawaii,  the  Philippine  Islands  and  Porto 
Rico.  The  American  people  have  seen  fit  to  keep  under  the  Nation's  guardian- 
ship, without  any  political  rights,  a  few  hundred  thousand  individuals  of  Indian 
race  inhabiting  the  United  States.  And  yet  the  number  of  these  Indians  is 
insignificant,  in  absolute  and  relative  terms,  compared  to  the  number  of  Mexican 
Indians,  and  could  not,  by  reason  of  its  insignificance,  jeopardize  American  demo- 
cratic institutions.  In  Hawaii,  the  Philippines  and  in  Porto  Rico  the  first  thing 
the  American  people  did  in  laying  the  foundations  of  democratic  government 
was  to  establish,  as  a  qualification  for  the  voter,  the  ability  to  read  and  write. 
Why,  then,  should  a  similar  system  be  regarded  as  undemocratic  in  Mexico? 

It  goes  without  saying  that  in  depicting  our  political  backwardness,  we  do 
not  speak  in  derision  of  our  people,  of  whom  we  form  a  part  and  whom  we 
love.  We  talk  as  men  who  honestly  state  facts.  Such  a  condition  does  not 
signify  a  reflection,  for  even  the  most  advanced  peoples  have  had  to  pass  through 
it  in  their  social  evolution. 

The  Authors 


II 

CHECKS  AND  BALANCES  OF  THE  BRANCHES  OF  GOVERNMENT. 

IMPEACHMENT  OF  OFFICIALS. 

METHODS  OF  SUBSTITUTING  THE   PRESIDENT. 

THE  PROVISIONS  of  the  constitution  drafted  at  Queretaro 
relating  to  the  function  of  the  powers  of  government  are 
substantially  those  of  the  constitution  of  1857.  The  former 
instrument,  however,  contains  certain  innovations  which  we 
think  helpful,  and  tending  to  secure  harmony  between  the 
branches  of  government,  without  leading  to  any  diminution  of 
the  liberties  of  the  people.  We  shall  note  these  innovations  in 
the  course  of  this  chapter. 

The  constitution  of  the  United  States  established  what  is 
known  as  the  "veto",  that  is  to  say,  the  power  of  the  president 
to  return  to  Congress  bills  enacted  by  it  which,  in  his  judgment, 
should  not  be  approved  as  being  contrary  to  the  public  interest 
or  to  the  constitution,  or  for  any  other  sufficient  reason.  Should 
Congress  vote  by  a  two-thirds  majority  to  override  the  veto, 
the  bill  becomes  a  law. 

This  concept  has  been  followed  in  the  main  by  the  Que- 
retaro constitution.  It  involves  a  considerable  advance  over  the 
constitution  of  1857  which  established  the  omnipotence  of 
Congress  at  the  expense  of  the  other  branches  of  government. 
We  do  not  hesitate,  therefore,  in  recommending  this  innovation, 
into  an  academic  discussion  of  which  we  shall  not  embark  as 
being  beyond  the  scope  of  this  document.  But  the  framers  of 
the  constitution  of  1917,  inspired  by  a  reactionary  tendency, 
set  themselves  out  to  limit  the  purely  legislative  function  of 
Congress.  To  this  end,  they  reduced  the  annual  sessions  to  a 
single  term  of  four  months,  while  they  left  to  the  sovereign  will 
of  the  President  the  power  to  summon  Congress  into  extra- 
ordinary session,  at  which  time,  however,  it  might  only  deal 
with  such  matters  as  were  expressly  enumerated  in  the  call. 

We  condemn  this  system,  not  only  as  anti-democratic,  but 
because  it  prevents  Congress  from  carrying  out  its  inherent 
function.  The  four  months  of  the  regular  session  would  probably 
suffice  for  an  examination  of  the  governmental  expenditures  for 


—  22  — 

the  preceding  year,  and  for  passing  the  budget  and  revenue 
bills;  but  if  Congress  earnestly  sets  itself  to  this  task  it  will 
not  have  time  for  other  matters  not  fiscal  in  character.  In 
order  to  avoid  this  difficulty,  the  Carranza  congress  resorted 
to  the  old  system  of  conferring  legislative  functions  upon  the 
Executive  —  an  odious  form  of  dictatorship,  which  those  who 
had  undertaken  a  revolution  to  sweep  away  a  dictatorship  and 
safeguard  popular  rights  did  not  hesitate  to  endorse! 

A  return  should  be  made  to  the  system  embodied  in  the 
constitution  of  1857.  With  a  Congress  elected  by  the  ballots 
of  Mexican  citizens  who  realize  the  importance  of  the  electoral 
function,  we  may  count  upon  a  legislative  branch  qualified  for 
the  performance  of  its  natural  duties,  and  which  need  not  be 
muzzled  as  the  Queretaro  constitution  seeks  to  do.  The  debates 
of  a  free  Congress,  chosen  by  a  competent  electorate,  would  be 
a  factor  of  prime  importance  in  creating  public  opinion  on 
affairs  of  national  interest  and  in  awakening  in  the  people  a 
civic  spirit. 

The  constitution  of  Queretaro  likewise  changes  the  precepts 
of  the  1857  document  as  to  the  impeachment  of  the  President 
and  other  high  federal  officials.  It  seems  needless  for  us  to 
condemn  here  as  dangerous  and  contrary  to  the  fundamental 
precepts  of  our  own  institutions  the  method  established  by  the 
constitution  of  1857,  whereby  a  mere  majority  of  the  Chamber 
of  Deputies  might  depose  an  official,  including  the  President  of 
the  Republic.  The  existence  of  this  power  in  the  Congress  has 
contributed  in  no  small  degree  to  the  use  by  various  presidents 
of  legal  and  illegal  means  to  command  a  favorable  majority  in 
the  House,  in  the  interest  of  their  own  safety  and  in  that  of 
the  government  itself.  But  the  Queretaro  constitution  goes  much 
farther  than  what  democratic  principles  recognize,  in  making 
the  President  unimpeachable,  so  that,  like  the  monarchs  of  divine 
right  who  could  do  no  wrong,  he  may  violate  the  constitution  and 
infringe  electoral  liberty  with  impunity.  This  is  nothing  more 
nor  less  than  the  consecration  of  dictatorship  as  a  legal  institu- 
tion. The  Queretaro  constitution  only  permits  the  impeachment 
of  the  President  in  the  exceptional  cases  in  which  he  commits 
grave  offenses  of  the  common  order  or  high  treason. 

We,  accordingly,  recommend  the  maintenance  of  the  pro- 
vision of  the  constitution  of  1857  which  provides  that  the 
President  may  be  impeached  for  express  violation  of  the  consti- 
tution and  for  attacks  ort  electoral  liberty.   Nevertheless,  we  are 


—  23  — 

of  the  opinion  that  those  portions  of  the  Queretaro  constitution 
which  aim  to  protect  officials  against  the  passions  that  are  so 
easily  aroused  in  a  body  of  the  organization  and  character  of  a 
popular  assembly,  and  which  are  based  on  the  constitution  of  the 
United  States,  should  be  followed  in  the  main  lines. 

The  constitution  of  1857  makes  of  the  Senate  the  tribunal 
to  impose  sentence  in  cases  of  official  offenses.  This  gives  the 
federal  courts,  should  the  occasion  arise,  the  power  to  review 
the  rulings  of  the  Senate,  whenever  the  accused  officials  shall 
institute  amparo  proceedings  on  the  ground  of  a  real  or  alleged 
violation  of  individual  guarantees.  This  may  well  cause  serious 
conflicts  between  the  two  branches  of  government  and  facilitate 
situations  favorable  to  coups  d'etat  and,  in  general,  to  disorders. 
If  the  function  of  the  Senate  in  the  matter  of  impeachment  is 
confined  within  strictly  political  limitations,  the  federal  courts 
ought  to  be  given  no  possible  ground  for  intervention.  The 
decision  handed  down  by  the  Senate  as  to  the  removal  of  a 
public  official  from  office  is,  and  should  be,  a  sovereign  and 
exclusive  act,  wholly  political  in  character,  involving  no  question 
of  a  violation  of  individual  guarantees.  When  the  functionary 
has  once  been  removed,  if  the  law  prescribes  a  penalty  other 
than  that  of  removal  from  office,  the  case  passes  into  the  jurisdic- 
tion of  the  proper  court  which  will  decide  on  the  application 
of  the  penalty  established  by  law. 

Lastly,  we  believe  that  in  suppressing  the  vice  presidency 
the  Queretaro  constitution  introduced  an  innovation  which,  while 
hardly  defensible  from  an  academic  point  of  view,  is  highly  to 
be  recommended  in  the  light  of  the  painful  experience  of  our 
history.  If  through  an  unhealthy  development  of  our  political 
life,  the  Vice  President  is  the  official  through  whose  election  the 
gravest  disagreements  have  been  producd  among  the  Mexican 
people,  then  the  vice  presidency  should  be  suppressed.  The 
Queretaro  constitution  entrusts  to  Congress  the  designation  of 
the  acting  or  substitute  president,  whenever  necessary.  While 
this  procedure  has  not  yet  been  put  to  the  test  of  a  practical 
application  under  normal  and  legal  conditions,  the  failure  of 
the  various  expedients  provided  in  the  constitution  of  1857  and 
its  successive  amendments  leads  us  to  believe  that  it  is  prefer- 
able to  adopt  a  system  substantially  identical  with  that  laid 
down  in  the  Queretaro  constitution.  We,  accordingly,  recommend 
that  the  constitution  of  1857  be  amended  in  this  respect. 


—  24  — 

We  may  sum  up  as  follows: 

With  a  view  to  bring  about  a  proper  balance  between  the 
different  branches  of  the  government  and  their  free  action  within 
the  respective  spheres  of  their  constitutional  attributes,  and  to 
assure,  as  far  as  possible,  the  political  stability  of  the  country, 
we  submit  the  following  recommendations: 

(A)  That  there  be  definitely  established  the  "veto",  namely, 
the  power  of  the  President  to  return  to  Congress,  within  ten  days 
and  with  such  observations  as  he  may  see  fit  to  make,  any  bill  re- 
ceived for  his  signature,  which,  in  his  judgment,  is  open  to  objection. 
Should  Congress  confirm  its  previous  action  by  a  two-thirds  vote 
of  the  members  present,  provided  there  is  a  quorum,  the  bill  then 
becomes  a  law.  The  Executive  shall  not  veto  the  resolutions  of 
Congress  when  it  acts  as  an  electoral  body  or  exercises  the  powers 
conferred  upon  it  by  the  constitution  in  the  impeachment  of  officials. 

(B)  That  Congress  ought  to  have  two  annual  sessions,  as  pro- 
vided in  the  constitution  of  1857.  It  is  our  judgment,  however,  that 
it  should  not  be  the  exclusive  attribute  of  the  Standing  Committee 
to  summon  Congress  or  either  of  the  legislative  bodies  into  extra- 
ordinary sessions  during  the  recess,  but  that  this  power  should  like- 
wise be  vested  in  the  President. 

i  (C)  That  only  in  the  event  of  the  suspension  of  guarantees  should 

Congress  invest  the  President  with  legislative  powers;  in  such  event 

.  it  shall  set  the  time  within  which  they  shall  be  exercised  and  the 

department  of  the  public  service  to  which  they  shall  be  confined. 
The  grant  of  "extraordinary  powers"  to  the  President,  —  other  than 
in  the  exceptional  cases  hereinbefore  enumerated,  —  is  contrary  to 
the  essence  of  democratic  government  and  is  an  attack  on  the  rights 

:  of  the  people. 

(D)  That  before  any  high  federal  official,  except  the  President, 
can  be  brought  to  trial  for  offenses  of  the  common  order,  it  will  be 
necessary  for  the  Chamber  of  Deputies,  by  a  two-thirds  vote  at  least, 
to  declare  that  there  are  grounds  to  proceed  against  the  accused 
official,  who,  in  such  event,  shall  be  removed  from  his  post  and  be 
subject  to  the  jurisdiction  of  competent  tribunals. 

(E)  That  pursuant  to  Article  103  of  the  constitution  of  1857,  the 
President  may  be  impeached  only  for  high  treason,  express  violation 
of  the  constitution,  an  attack  on  electoral  freedom,  or  grave  offenses 
of  the  common  order.  Should  the  Chamber  of  Deputies,  by  a  vote 
of  two-thirds,  decide  that  there  are  grounds  to  proceed  against  the 
President,  the  case  shall  be  reviewed  by  the  Senate.  Should  the 
Senate,  also  by  a  vote  of  at  least  two-thirds  of  its  membership, 
confirm  the  decision  of  the  Chamber  of  Deputies,  the  President  shall 
be  forthwith  removed  from  office  and  be  subject  to  the  jurisdiction 
of  the  regular  courts. 


25 


(F)  That  in  the  case  of  dereliction  of  official  duty  on  the  part  of 
a  government  official,  a  procedure  analogous  to  that  prescribed  for 
the  impeachment  of  the  President  shall  be  followed. 

(G)  That  the  regular  courts  shall  be  exclusively  charged  with  the 
trial  of  functionaries  of  any  category  when  accused  of  offenses  of 
the  common  order  or  official  offenses,  without  any  other  limitation 
than  the  findings  of  the  Chamber  of  Deputies,  or  of  the  Chamber 
and  of  the  Senate,  in  the  cases  hereinbefore  presented.  Accordingly, 
the  jurisdiction  in  the  criminal  order  conferred  on  the  Senate  by 
Article  103  of  the  constitution  of  1857  ought  to  be  terminated. 

(H)  That  the  temporary  or  permanent  disability  of  the  President 
should  be  provisionally  filled,  by  operation  of  law,  by  the  Secretary 
of  Foreign  Affairs,  and  in  the  absence  of  the  latter  by  the  Secretary  of 
Gobernacion;  but  Congress  shall  forthwith  proceed  to  choose  an 
acting  President.  The  secretary  of  department  who  shall  have  as- 
sumed the  provisional  presidency  ought  not  to  be  eligible  for  the 
office  of  substitute  president.  Should  Congress  be  in  session,  it 
might  sit  as  an  electoral  college  so  soon  as  the  disability  of  the 
President  were  to  occur;  if  in  recess  it  might  be  summoned  in  extra- 
ordinary session  without  delay  by  the  Standing  Committee.  Senators 
and  Deputies  ought  to  vote  individually  by  secret  ballot. 


Ill 

FOREIGN    AFFAIRS 

ANY  DIPLOMACY  inspired  in  a  spirit  of  insincere  patriotism 
and  merely  rhetorical  is  helpless  to  safeguard  the  dignity 
of  Mexico  and  to  avoid  encroachment  upon  its  sovereignty,  as 
was  seen  during  the  Carranza  administration.  We  trust  that  this 
type  of  diplomacy  will  be  definitely  abandoned,  as  also  that 
which  seeks  to  awaken  international  antagonisms  on  this  con- 
tinent, with  the  vain  and  illusory  hope  of  finding  in  kindred 
peoples  the  instrument  to  ward  off  the  geographic  and  economic 
fatalities  which  at  times  seem  to  conflict  with  our  happiness  and 
our  standing  as  a  free  people. 

We  must  frankly  face  our  international  situation  and  not 
seek,  in  vain,  to  avoid  it  by  fair  words  or  by  unfortunate 
manoeuvres.  Whether  we  will  or  not,  with  no  other  country 
in  the  world  are  we  bound  by  such  close  ties  as  with  the  United 
States.  We  should  then  aim  to  develop  our  national  life,  in 
entire  harmony  with  the  national  life  of  our  neighbors  to  the 
north,  ,with  no  impairment  of  our  autonomy,  nor  loss  of  our 
social,  historical  and  racial  traits.  In  close  touch  with  our 
neighbors  to  the  north,  we  enjoy  the  use  of  their  capital  in 
the  development  of  our  resources,  their  markets  for  the  sale  of 
our  products,  their  technical  skill  to  train  our  producing  class; 
these  are  but  some  of  the  many  advantages  we  derive  from 
their  higher  civilization.  They,  in  turn,  need  our  labor,  our 
metals,  our  fuel,  our  varied  crops;  while  finding  in  Mexico  a 
fertile  field  for  their  spirit  of  enterprise.  Their  relations  with 
other  countries  of  the  world  cannot  be  a  matter  of  indifference 
to  us,  since  their  victories  or  their  defeats  must  be  reflected  on  us, 
either  adversely  or  favorably;  and  the  phenomena  of  an  economic 
or  moral  order  which  such  events  bring  in  their  train  are  certain 
to  react  in  Mexico. 

In  addition  to  these  considerations,  we  should  bear  in  mind, 
in  defining  our  foreign  policy,  that  public  opinion  in  the  United 
States, —  the  sound  and  well-informed  public  opinion, —  rejects 
any  policy  toward  Mexico  that  does  not  rest  on  absolute  equality, 
cordiality  and  mutual  respect.   This  situation  helps  our  govern- 


—  28  — 

ments  to  outline  a  far-sighted  foreign  policy  which  shall  know 
how  best  to  turn  to  our  own  advantage  the  circumstances 
just  defined. 

The  preferential  position  given  to  our  relations  with  the 
United  States  does  not  mean  that  we  fail  to  realize  the  im- 
portance of  our  relations  with  other  countries,  although  our 
contact  with  them  cannot  be  compared,  either  from  an  economic 
or  political  standpoint,  with  that  which  we  maintain  with  the 
United  States.  The  intellectual  influence  exercised  on  us  by 
certain  European  nations,  the  similarity  of  race,  history  and 
language  that  we  have  with  other  peoples,  besides  reasons  of 
a  commercial  and  financial  order,  maintain  alive  the  interna- 
tional interest  in  Mexican  matters.  This  conjuncture  of  events 
requires  us  to  observe  a  conduct  in  our  foreign  relations  which 
shall  contribute  to  recover  the  respect  of  the  world  which  we 
formerly  enjoyed.  We  are  not  blind  to  the  fact  that  the  first 
condition  in  attaining  this  end  is  the  performance  of  our  inter- 
national duties,  —  a  subject  which  we  shall  consider  in  detail 
in  various  chapters  of  this  document,  —  but  we  should  forth- 
with institute  in  our  dealings  with  other  peoples  a  serious, 
decorous  diplomacy,  without  boastings  impossible  to  maintain, 
which  shall  aim  to  have  us  regarded  as  honest  men,  rather  than 
as  subtle  and  invincible  dialecticians. 

Our  recommendations  in  this  regard  follow: 

The  Mexican  Government  should  adopt  a  frank  and  open  foreign 
policy,  free  from  special  alliances  and  entanglements,  and  inspired  in 
the  concept  of  world  brotherhood. 

In  our  relations  with  the  other  peoples  of  this  continent,  we 
should  aim  to  have  the  principle  of  mutual  respect  for  territorial 
integrity  and  political  sovereignty  prevail  as  a  principle  of  Inter- 
American  public  law. 

Especially  in  our  relations  with  the  United  States,  our  diplomacy 
should  bear  in  mind  that  with  no  other  country  are  we  so  closely 
bound  by  ties  of  geographic  propinquity,  by  the  exchange  of 
commodities,  and,  in  general,  by  countless  reasons  of  an  economic 
and  moral  order. 

The  Government  of  Mexico  should  seek  the  early  celebration  of 
conventions  with  the  United  States  for  the  settlement  of  the  pending 
boundary  questions  between  the  two  countries  (the  Chamizal  Case 
and  the  definition  of  the  status  of  international  rivers),  and  for  the 
facilitation  of  the  exchange  of  commodities  and  the  promotion  of 
relations  between  the  inhabitants  of  both  countries,  particularly  along 
the  border  where  the  contact  between  the  two  peoples  is  so  intimate. 
Among  such  conventions,  particular  attention  should  be  paid  to  that 


20 


defining  the  validity  of  judgments  and  rulings  of  the  civil  courts  of 
Mexico  with  regard  to  persons  and  things  within  the  jurisdiction 
of  the  United  States,  and  vice  versa.  Until  such  time  as  an  inter- 
national agreement  on  the  matter  is  reached,  the  Mexican  courts 
should  strictly  observe  the  principle  of  reciprocity. 

Bearing  in  mind  that,  in  normal  times,  the  majority  of  our  im- 
ports from,  and  exports  to,  the  United  States  are  carried  by  railroad, 
and  in  the  absence  of  a  united  transportation  and  rate  system  which 
shall  assure  through  traffic  and  avoid  the  inconveniences  of  the 
application  of  different  laws  and  regulations,  our  government  should 
initiate  the  execution  of  a  treaty  with  the  United  States  Govern- 
ment which  shall  embody  the  general  conditions  applicable  to  inter- 
national railroad  traffic  and  rates. 


IV 

THE    NATURALIZATION    AND    CIVIL    STATUS 
OF    ALIENS 

AMONG  the  novelties  introduced  by  the  Carranza  legislation, 
and  particularly  by  the  constitution  framed  at  Queretaro, 
those  referring  to  the  rights  of  aliens  and  naturalized  Mexicans 
have  been  especially  criticized  abroad.  Not  only  the  former, 
but  what  is  more  difficult  to  explain,  the  latter,  as  well,  are 
hampered  with  countless  limitations  and  even  incapacities, 
which  place  them  in  a  position  of  mortifying  inferiority  with 
regard  to  native-born  citizens. 

It  would  be  out  of  place  to  enumerate  all  the  restrictive 
precepts  of  the  new  legislation  on  the  subject.  Mention  will, 
accordingly,  be  made  only  of  those  laws  which  are  particularly 
striking. 

Article  27  of  the  Queretaro  constitution  embodies  the 
principle  that  aliens  may  not  own  real  estate,  nor  be  granted 
concessions  covering  waters,  mines,  and  the  like,  except  by 
the  grace  of  the  executive  authority,  after  the  interested  party 
has  made  formal  waiver  of  the  right  to  invoke  the  protection 
of  his  government. 

While  it  is  true  that  certain  countries  do  not  grant  aliens 
the  right  to  acquire  real  estate,  we  are,  nevertheless,  of  the 
opinion  that  Mexico  should  return  to  the  liberal  system  that 
prevailed  under  the  constitution  of  1857.  Having  due  regard 
for  the  cultural  and  economic  situation  of  our  native  population, 
coupled  with  the  fact  of  its  sparseness,  it  appears  advisable  to 
encourage  the  establishment  of  foreigners  in  Mexico.  Experience 
has  shown  them  to  be  elements  of  moral  progress  and  factors 
in  the  development  of  public  and  private  wealth. 

It  should  be  said  that  the  requisite  demanded  by  Article  27 
of  the  constitution  of  Queretaro  as  a  condition  for  every  alien 
to  own  land,  namely,  the  waiver  of  the  right  of  invoking  the 
protection  of  his  government,  is  manifestly  illusory.  No  foreign 
government  recognizes  the  force  of  such  a  waiter.  The  law  then 
fails  in  its  purpose,  and  becomes  useless  and  gratuitously  hostile 
to  citizens  of  other  countries. 


—  32  — 

Provisions  fixing  the  civil  capacity  of  aliens  have  no  place 
in  the  political  constitution  of  the  republic.  They  belong  in 
general  statutes,  in  special  laws  on  naturalization,  and  in  inter- 
national treaties.  In  the  absence  of  express  treaty  stipulations, 
Mexico  must  accept,  in  general  terms,  the  principle  of  the 
equality  of  civil  capacity  of  Mexicans  and  aliens,  excepting 
limitations  required  by  the  principle  of  reciprocity,  and  such 
other  limitations  as  arise  out  of  the  needs  of  domestic  safety 
or  of  insurance  against  international  complications. 

With  regard  to  foreign  corporations,  we  believe  that  the 
incapacities  placed  on  them  by  the  Queretaro  constitution,  in 
provisions  similarly  incongruous  in  a  constitution,  reveal  in  the 
framers  a  mistaken  appreciation  of  the  present  day  needs  of  the 
country.  We  are  not  opposed,  in  principle,  to  the  establishment 
of  these  incapacities,  insofar  as  they  are  confined  to  the  owner- 
ship of  real  property;  but,  at  the  same  time,  we  believe  that 
the  legislator  should  mitigate  the  severity  of  his  theories  when 
the  great  interests  of  the  nation  so  demand.  The  position  in 
which  Mexico  now  finds  herself  as  the  result  of  her  internecine 
strife  and  the  condition  of  the  world  money  market  caused  by 
the  European  war  compel  the  Mexican  statesmen  to  adopt  a 
generous  policy  which  shall  attract  to  the  country  capital  to 
develop  our  resources  and  contribute  to  the  moral  and  economic 
betterment  of  our  down-trodden  people.  In  harmony  with  this 
policy,  it  is  necessary  to  return  to  the  former  system  and  to 
permit  foreign  companies  to  enjoy  the  same  rights  they  enjoyed 
before  the  Queretaro  constitution,  as  the  most  practical  method 
of  inducing  foreign  capital  to  engage  in  Mexican  enterprises. 
At  a  later  date,  when  the  political  equilibrium  has  been  restored, 
when  the  methods  of  government  admit  of  no  question  as  to 
their  probity,  when,  in  a  word,  we  have  reconquered  the  con- 
fidence abroad  which  we  once  enjoyed,  the  time  will  have  come 
slowly  to  force  foreign  capital  to  operate  in  Mexico  within  the 
forms  of  association  prescribed  by  Mexican  law;  but  everything 
which  at  the  present  moment  is  done  in  this  regard  will  affect 
adversely  the  economic  progress  of  Mexico. 

On  the  other  hand,  it  is  our  opinion  that  the  very  lax 
requisites  prescribed  by  our  present  commercial  law  for  foreign 
companies  operating  in  Mexico  should  be  revised  and  adequately 
regulated.  The  State  should  receive  abundant  guarantees  before 
recognizing  the  existence  and  juridical  personality  of  corporate 
entities  created  under  foreign  law.   It  should  equally  assure  the 


—  33  — 

safety  of  the  interests  of  Mexican  citizens  who  have  acquired 
stock  therein  or  who  may  have  dealings  with  them. 

Article  33  of  the  Queretaro  constitution  vests  in  the  President 
the  power  to  expel  any  alien  whose  presence  in  Mexico  he  may 
deem  inexpedient.  Such  power  is  repugnant  to  modern  legal 
thought,  which  recognizes  the  right  of  every  man  to  live  in  what- 
ever country  suits  his  pleasure,  with  such  limitations  as  the  law 
may  prescribe,  not  the  caprice  of  a  man,  however  high  his  official 
investiture.  It  is.  right  that  the  undesiderable  alien  should  be 
expelled,  after  he  has  been  duly  declared  so  to  be,  in  accordance 
with  the  application  of  general  precepts  fixed  by  the  legislator; 
but  to  leave  to  the  irresponsible  whim  of  a  functionary  the 
determination  of  the  expediency  of  the  continued  residence  of 
an  alien  in  Mexico  is  tantamount  to  placing  all  foreigners  living 
there  in  the  status  of  residents  by  grace.  Such  a  condition  is  in 
conflict  with  every  principle  of  justice,  with  international  law, 
and  even  with  treaties  now  in  force. 

In  the  case  of  naturalized  citizens,  the  laws  enacted  by 
the  Carranza  regime  prescribe  such  a  large  number  of  humiliat- 
ing exceptions  and  establish  such  a  marked  inferiority  between 
naturalized  and  native-born  citizens  that  it  would  appear  as  if 
the  theory  underlying  these  laws  was  that  of  closing  the  door 
to  foreign  immigration,  to  whose  beneficent  influence  other 
nations  of  the  American  continent  owe  much  of  their  progress 
and  political  stability.  It  is  enough  to  cite  the  fact  that  today 
the  requisite  of  being  a  citizen  by  birth  is  demanded  in  Mexico 
of  anyone  desiring  to  become  a  pilot  or  engineer  of  a  Mexican 
merchant  vessel,  or  an  assemblyman  in  a  city  council. 

It  is  not  to  be  expected  that,  in  the  face  of  such  restric- 
tions which  involve,  at  least,  profound  humiliation,  naturalized 
foreigners  in  Mexico  should  feel  any  love  for  their  adopted 
land  and  be  ready  to  honor  and  defend  it,  as  if  it  were  their 
country  by  birth.  Nor  can  the  acquisition  of  such  a  mutilated 
citizenship  be  held  in  esteem  by  nationals  of  other  countries. 

We  believe  that,  in  this  regard,  the  prevailing  views  of 
world  fraternity  and  the  advantages  to  our  own  country,  in  view 
of  the  appalling  poverty  and  illiteracy  of  the  four-fifths  of  cur 
population,  call  for  liberal  laws,  more  liberal  even  than  those  that 
prevailed  before  the  Queretaro  constitution.  As  to  unnatural;zed 
aliens,  we  do  not  advocate  any  more  general  restrictions  than 
are  strictly  necessary  for  the  internal  and  foreign  safety  of  the 
country  and  the  preservation  of  our  racial   characteristics.    In 


—  34  — 

the  case  of  naturalized  foreigners,  we  believe  that  the  system 
prevailing  in  the  United  States  should  be  adopted.  There,  the 
status  of  native-born  citizen  is  required  only  for  the  presidency. 
With  this  single  exception,  the  naturalized  citizen  and  the  native- 
born  citizen  should  be  equal  in  the  eyes  of  the  law. 

Our  recommendations  on  this  subject  are  as  follows: 

Aliens  should  enjoy  in  Mexico  the  same  civil  rights  as  Mexicans, 
excepting  only  the  power  of  the  Government  to  expel  the  undesirable 
alien  in  such  terms  and  conditions  as  the  law  shall  prescribe. 

The  civil  rights  of  aliens  may,  however,  be  limited  by  the  ap- 
plication of  the  principle  of  reciprocity,  and  on  grounds  of  domestic 
or  foreign  safety,  as  denned  by  law.  Similarly,  restrictions,  and  even 
prohibitions,  may  be  introduced  into  the  immigration  laws  as  to  the 
entrance  into  Mexico  of  foreigners  of  a  certain  race  or  status. 

Foreign  commercial  companies  may  engage  in  business  in  the 
Republic  and  acquire  therein  real  property  of  any  kind,  whenever 
equal  privileges  are  granted  to  Mexican  companies  in  that  country 
or  state  under  whose  laws  they  are  organized.  In  any  event,  such 
foreign  companies  should  be  subject  to  the  conditions  prescribed  by 
Mexican  law  to  prove  their  legal  existence  and  corporate  powers, 
and  to  safeguard  the  interests  of  Mexican  stockholders  and  of  all 
persons  in  Mexico  doing  business  with  them.  To  this  end,  there 
ought  to  be  established  a  special  bureau  to  examine  and  record  docu- 
ments, as  well  as  to  see  that  foreign  corporations  comply  with  the 
obligations  imposed  by  our  laws. 

Neither  the  civil  statutes  nor  the  political  laws  ought  to  establish 
any  distinctions  between  Mexicans  by  birth  and  by  naturalization; 
but  the  law  of  naturalization  should  be  revised  so  as  to  guarantee  the 
sincerity  of  motive  prompting  the  foreigner  seeking  Mexican  citizen- 
ship. 

Neverthless,  the  requisite  of  Mexican  citizenship  by  birth  ought 
to  be  required  to  be  President.  In  order  to  fill  other  public  posts 
of  a  political  character,  whether  of  popular  election  or  not,  a 
naturalized  Mexican  citizen  ought  to  have  resided  in  the  country  for 
a  period  of  not  less  than  ten  years  from  the  date  when  he  acquired 
Mexican  citizenship. 


MUNICIPAL    AUTONOMY 

^HE  SUPPRESSION  of  the  system  of  Jefes  Politicos  through- 
*  out  the  Republic  is  a  change  for  the  better,  due,  in  all 
justice,  to  the  revolution.  Without  considering  the  usefulness, 
from  an  administrative  point  of  view,  of  these  functionaries, 
we  must  admit  that  they  served  as  effective  instruments  of 
governmental  tyranny,  thereby  becoming  not  only  unpopular 
but  even  detested. 

In  order  to  guarantee  the  permanency  of  this  achievement 
of  the  revolution,  the  Queretaro  constitution  provided  that  the 
basis  of  the  territorial  division  of  States  and  of  their  political 
and.  administrative  organization  should  be  the  autonomous 
municipality.  To  this,  no  objection  can  be  raised.  But  the 
framers  of  the  above-mentioned  constitution,  out  of  deference 
to  an  old  national  prejudice,  provided  that  each  municipality 
should  be  administered  by  a  city  council  chosen  by  direct  popular 
vote,  under  the  belief  that  this  is  a  necessary  condition  to  assure 
municipal  autonomy. 

We  are  ready  to  admit  that  the  municipality  should  con- 
stitute the  political  administrative  division  of  each  State,  and 
that  between  the  State  government  and  the  municipal  govern- 
ment there  should  be  no  intervening  authority  (the  intervening 
authority  heretofore  having  been  the  Jefe  Politico);  but  we 
reject,  as  scientifically  incorrect  and  as  contrary  to  experience, 
the  theory  that  municipal  autonomy  only  exists  when  municipal 
affairs  are  exclusively  in  charge  of  a  corporate  body  known 
as  a  city  council. 

Our  own  experience,  confirmed  by  that  of  other  countries, 
shows  that  nothing  has  ever  been  devised  less  fitted  to  administer 
the  public  affairs  of  a  municipal  c6mmunity  than  a  group  of 
men,  chosen  by  popular  ballot,  professional  politicians  for  the 
most  part,  or  mere  agitators  who  at  the  very  least  use  their 
offices  for  purposes  almost  wholly  political.  The  corruption  and 
incompetency  that  characterize  city  councils  that  administer  mu- 
nicipal affairs  indicate  beyond  question  that  another  solution  of 
the   problem   of   good   municipal   government   must   be   sought, 


—  36 


which  shall  not,  of  course,  sacrifice  the  basic  principle  of  the 
autonomy  of  the  municipality. 

General  rules  cannot  be  laid  down  in  this  connection.  There 
are  municipalities  which,  through  their  lack  of  adequate  revenue, 
their  small  number  of  inhabitants,  and  the  simplicity  of  their 
municipal  needs  may  be  satisfactorily  governed  by  a  city  council. 
In  such  event,  the  administrative  body  ought  to  be  composed 
of  a  small  number  of  men  chosen  from  among  neighbors  who 
personally  know  one  another,  and  whose  duties,  light  and  in 
no  sense  technical,  can  be  discharged  under  the  direct  super- 
vision of  the  community. 

But  in  the  case  of  densely  populated  centres  whose  in- 
habitants are  counted  by  tens  or  hundreds  of  thousands,  the 
elements  of  the  problem  change  completely.  The  election  of 
councilors  then  becomes  a  question  of  politics,  and  the  complex 
and  varied  character  of  municipal  affairs  renders  difficult  the 
wise  selection  of  a  larger  number  of  competent  administrators. 
Furthermore,  individual  responsibility  is  in  such  cases  .im- 
possible. 

Large  city  councils  become,  through  force  of  circumstances, 
deliberative  bodies,  subject  to  political  passions  proportionately 
as  the  number  of  members  is  greater.  By  reason  of  their  struc- 
ture and  constituency,  these  bodies  lack  technical  skill,  and  are 
unable  to  carry  out  any  administrative  task  really  beneficial  and 
in  the  public  service.  It  is  but  a  step  from  this  stage  to  that  of 
dishonesty  and  chaos  in  municipal  administration. 

Examples  of  this  state  of  things  were  afforded  by  the  city 
councils  of  Mexico  City,  and  those  of  the  majority  of  the  large 
towns  in  the  Republic  during  the  Carranza  administration. 
Blackmailing  councilors,  dishonest  employees,  shocking  ignor- 
ance and  incompetence  on  the  part  of  both,  abandonment  of  the 
public  services  most  needed  by  the  community  (for  the  upkeep 
of  which,  however,  heavy  taxes  were  collected  from  the  people) 
—  this  picture  of  shame  was  the  result  of  the  erroneous  applica- 
tion of  a  fundamental  principle  of  democratic  government. 

The  method  of  administering  a  municipality  should  be 
determined  by  conditions  obtaining  in  the  municipality  itself: 
what  is  advantageous  to  one  may  be  disastrous  to  another. 
In  some  cases,  we  repeat,  it  will  be  advisable  that  the  council 
be  endowed  with  administrative  powers;  in  others,  that  they 
be  exercised  by  a  mayor,  with  the  right  of  supervision    and 


—  37  — 

censure  in  the  council,  as  well  as  the  properly  legislative  func- 
tion of  issuing  municipal  ordinances,  approving  expenditures, 
and  authorizing  contracts  for  public  works,  franchises  for  public 
utilities,  etc.;  in  still  others,  it  will  be  preferable  that  the  ad- 
ministrative duties  of  the  mayor  be  distributed  among  a  small 
number  of  administrators.  In  any  event,  and  whatever  be  the 
method  adopted,  the  principle  of  municipal  autonomy  is  to  be 
safeguarded.  This  can  be  fully  guaranteed  by  Ihe  popular  elec- 
tion of  officials,  and  with  the  administration  of  the  mun;c:ral 
services  and  revenues  as  a  sovereign  attribute  of  the  municipality, 
free  from  control  by  federal  or  state  governments. 

We,  therefore,  submit  the  following  recommendations: 

The  basis  of  the  administrative  and  political  organization  of  the 
Republic  ought  to  be  the  autonomous  municipality,  it  being  clearly 
understood  that  between  the  properly  municipal  functions  and  the 
general  powers  pertaining  to  the  state  or  federal  governments,  as 
the  case  may  be,  no  official  nor  administrative  functionary  shall 
intervene.  Accordingly,  the  constitution  should  forbid  the  restoration 
of  Jefes  Politicos,  Prefectos  Politicos,  or  any  other  similar  authorities. 

The  Federal  Congress  and  the  State  legislatures  ought  to  be 
charged  with  enacting  for  the  Federal  District  and  Territories  and  for 
the  States,  respectively,  "general  statutes  on  municipal  administration, 
and  with  the  issue  of  special  munic'pal  charters  in  the  case  of  the 
creation  of  new  municipalities  or  of  the  reorganization  of  existing 
municipalities.  In  any  event,  the  municipality  ought  to  be  sovereign 
in  the  administration  of  its  services,  as  well  as  in  the  collection  and 
disbursement   of  revenues  assigned  to  it  under  the  law. 

Mayors  or  other  officials  charged  with  municipal  admin  V.ration, 
as  well  as  city  councils  or  town  corporations,  shall  be  chosen  by 
popular  ballot.  The  powers  of  the  latter  class  shall  be  fixed  by  law 
or  by  the  municipal  charter,  on  the  ground  that,  except  in  special 
cases,  they  are  to  be  essentially  legislative  and  not  administrative. 


VI 
EDUCATION 

THE  SOCIAL  condition  of  the  Mexican  people,  like  that  of  all 
backward  peoples,  presents  many  striking  contrasts.  Side 
by  side  with  the  more  rudimentary  and  primitive  industrial 
methods,  are  to  be  found  the  large  manufacturing  establishments 
of  modern  days.  The  transport  of  freight  on  the  backs  of  man 
or  beast  competes  with  railroad  traffic;  the  plough  introduced 
by  the  conquistador es  in  the  sixteenth  century  bars  the  way  to 
the  use  of  modern  farm  implements.  Without  indulging  in  rhe- 
torical figures,  it  may  be  said  that  Mexican  society  is  composed 
of  two  distinct  societies:  that  of  the  under-civilized  forming  the 
overwhelming  majority,  and  that  of  those  who,  in  relatively  small 
numbers,  live  the  life  of  modern  civilization. 

According  to  data  published  at  the  end  1919  by  the  Director 
General  of  Education  of  the  Carranza  administration,  the  number 
of  Mexicans  who  can  read  and  write  is  but  slightly  in  excess 
of  three  million,  while  tfre  remaining  twelve  million  of  the  popu- 
lation are  sunk  in  illiteracy.  The  first  group  is  fit  to  engage  in 
democratic  government,  and  can  intelligently  weigh  its  problems. 
Is  it  reasonable  to  say  that  those  who  comprise  the  second 
group,  that  Indians  who  speak  no  Spanish  and  know  no  world 
beyond  the  settlement  in  which  they  were  reared,  can  realize 
what  is  meant  by  a  ballot,  a  federation,  the  independence  of 
the  branches  of  government,  or  any  other  of  the  basic  concepts 
of  our  political  system? 

It  is  vain  to  argue  that  the  same  economic  principles,  the 
same  social  institutions,  or  political  laws  operate  in  this  dual 
system  of  national  elements.  Mexican  statesmen  who  have  be- 
lieved, or  have  appeared  to  believe,  that  this  is  possible,  must 
admit  themselves  worsted  after  a  hundred  years  of  unbroken 
failure.  No  one  can  loner  ignore,  if  his  word  be  sincere,  that 
these  human  groups  are  incapable  of  permanent  co-ordination, 
and  that  if  they  co-exist  it  is  because  one  group,  by  force  or  by 
acquiescence,  is  subordinate  to  the  other.  It  is  this  condition 
that  occasions  the  profound  crises  and  chronic  convulsions  that 
our  history  depicts. 


—  40  — 

But  the  subordination  of  one  group  to  the  other  means 
tyranny  and  injustice.  Justice  and  liberty  are  only  to  be  attained 
when  the  great  backward  group  is  redeemed  by  the  small  civilized 
group,  and  succeeds  in  raising  itself  to  that  standard  of  self- 
governing  peoples  among  whom  democracy  is  a  real  function 
and  not  a  mere  word  inscribed  in  statutes  and  enrolled  in  re- 
volutionary manifestos.  We  mean  that  the  light  of  education 
must  be  diffused  throughout  the  masses  so  as  to  open  to  them 
horizons  now  hidden;  that  physical  needs  and  desires  for  re- 
creation and  adornment,  which  their  squalid  condition  has  not 
hitherto  allowed  them,  must  be  created,  thereby  stimulating  their 
eagerness  for  work;  that  they  must  be  given  practical  instruction 
in  manual  arts  and  agricultural  training  to  redeem  them  from 
the  deadly  routine  in  which  they  are  now  submerged;  and,  lastly, 
that  the  spirit  of  solidarity  with  the  community  of  which  they 
form  a  part  must  be  inculcated  in  them,  progressing  by  stages 
from  the  settlement  to  the  municipality,  from  the  municipality 
to  the  state,  and  from  the  state  to  the  nation. 

The  universal  graded  school  is,  if  not  the  first,  at  least  One 
of  the  most  effective  instruments  Of  education  in  this  immense 
task.  By  universal  is  meant  that  the  school-houses  should  be 
accessible  not  alone  to  the  city  multitudes  but  to  the  immense 
and  even  more  ignorant  population,  of  the  fields  and  mountains, 
until  there  is  not  a  single  nook  or  corner  where  its  beneficent 
action  is  not  felt. 

When  this  requisite  has  been  satisfied,  the  curriculum  of 
the  grade  school  will  depend  upon  the  financial  resources  and 
teaching  corps  available,  ranging  all  the  way  from  rudimentary 
education  to  higher  education,  but  ever  guided  by  the  pract'cal 
aim  of  making  of  each  individual  a  civilized  man  of  action. 

The  municipalities  and  states  have  not  thus  far  been  able 
to  meet  this  immense  obligation,  either  with  sufficient  means 
or  quality  of  service.  In  the  palmiest  days  of  Mexico,  the  state 
and  municipal  schools  satisfied  the  needs  of  barely  seventeen 
per  cent  of  the  scholastic  population,  and  private  institutions 
added  only  four  per  cent  more. 

Fiscal  poverty  has  been  the  cause  of  this  inadequacy,  as 
it  must  continue  to  be  for  many  years  to  come.  Today  the  states 
would  be  called  upon  to  devote  the  total  of  their  revenues,  and 
even  a  little  more,  in  order  to  furnish  adequate  educational 
facilities,  at  least  in  so  far  as  the  number  of  schools  is  concerned. 

The  Carranza  regime,  which  loudly  and  constantly  boasted 


—  41  — 

of  its  love  and  interest  for  the  masses  and  which  held  itself  up 
to  the  world  as  the  redeemer  of  the  oppressed,  counts  among 
its  great  shortcomings  that  of  having  destroyed  much  of  what 
former  governments  had  done  for  the  education  of  the  people. 
It  began  by  prohibiting  in  the  constitution  all  intervention  by 
the  federal  government  in  elementary  education.  If  then  sup- 
pressed the  department  of  public  instruction,  that  is  to  say,  the 
instrumentality  through  which  the  federal  government  by  means 
of  such  revenue  as  it  had  available,  might  remedy,  in  part,  the 
immense  deficiencies  of  state  scholastic  organizations.  In  pro- 
hibiting in  private  educational  establishments  the  teaching  of 
every  religion,  it  deprived  a  portion  of  the  people  of  the  benefits 
which  it  might  derive  from  private  initiative  in  education. 

The  results  of  this  policy  have  been  so  fatal  that  in  the 
very  capital  of  the  Republic,  by  the  end  of  the  year  1919,  one 
hundred  and  twenty-eight  public  schools  had  closed  their  doors, 
and  twenty-five  thousand  children  of  school  age  were  deprived 
of  all  educational  facilities.  In  other  municipalities  of  the  Federal 
District  the  disaster  attained  incredible  proportions:  a  munici- 
pality, like  Tacubaya,  which  prior  to  the  revolution  had  twenty- 
two  primary  schools,  like  Xochimilco,  which  had  thirty-six,  had 
to  close  all  their  schools. 

If  this  occurred  in  the  Federal  District,  —  in  the  most  popu- 
lated, wealthy,  and  cultured  centre  of  the  Republic,  —  it  is  easy 
to  surmise  the  frightful  condition  to  which  this  elementary  service 
of  popular  education  reached  in  the  states  during  the  Carranza 
regime. 

We  readily  admit  that  the  government  that  has  succeeded 
that  of  Sr.  Carranza  has  announced  certain  laudable  propositions 
designed  to  remedy  the  situation;  but  our  judgment  is  that  this 
matter  requires  a  vast  and  comprehensive  plan  which  shall  place 
at  the  disposal  of  the  cause  of  public  education  the  largest 
financial  resources  available  and  the  greatest  amount  of  intel- 
ligence which  can  be  called  into  play. 

Our  specific  recommendations  are  as  follows: 

In  view  of  the  impossibility  of  establishing  in  Mexico  a  really 
democratic  regime  so  long  as  twelve  million  Mexicans  out  of  slightly 
over  fifteen  millions  can  neither  read  nor  write,  the  conclusion  is 
forced  upon  us  that  the  evil  of  illiteracy  constitutes  a  grave  and 
urgent  problem.  Accordingly,  we  denounce  the  policy  set  up  by  the 
Carranza  constitution  which  rendered  almost  impossible  the  utiliza- 
tion of  private  initiative  in  popular  education  and  which  forbade  all 


—  42  — 

intervention  by  the  federal  powers  in  primary  instruction.  All 
energies,  those  of  individuals  and  private  associations  no  less  than 
those  of  public  authorities,  —  federal,  state  and  municipal,  in  their 
respective  jurisdictions,  —  should  be  bent  to  achieve  the  redemption 
of  the  great  mass  of  the  Mexican  people  from  the  appalling  ignorance 
in  which  they  live,  and  to  make  citizens  in  fact  of  those  who  have 
heretofore  been  so  only  in  name.  The  federal  constitution  should, 
therefore,  embody  as  one  of  the  individual  guarantees  freedom  of 
teaching,  with  no  other  restriction,  in  so  far  as  may  relate  to  primary 
instruction,  than  that  it  be  subject  to  the  curricula  of  similar  public 
schools  and  to  official  supervision,  particularly  in  regard  to  civic 
instruction  and  history. 

The  same  instrument  should  likewise  prescribe  the  concurrent 
power  of  the  municipalities,  states  and  federation  to  establish  and 
maintain  primary  schools. 

The  tendency  of  these  schools  should  be  essentially  practical, 
civic  and  educational.  They  should  aim  to  form  civilized  members 
of  the  community. 

In  view  of  the  need  of  not  less  than  sixty  thousand  such  es- 
tablishments to  make  primary  education  universal  and  effective, 
the  intervention  of  the  federal  government  must  be  necessarily  large. 
Without  the  resources  of  the  federal  government  and  without  the 
technical  elements  which  it  has  at  its  disposition,  this  urgent  and 
indispensable  work  cannot  be  carried  into  execution.  Accordingly, 
we  recommend  the  restoration  of  the  department  of  public  instruc- 
tion, which  shall  be  the  instrumentality  of  the  federal  government 
in  this  phase  of  its  labors. 

The  federal  congress  should  enact  whatever  legislation  is  neces- 
sary for  the  exercise  of  the  concurrent  power  pertaining  in  this 
matter  to  the  various  authorities,  so  that  conflicts  of  jurisdiction 
may  be  avoided  and  methods  of  instruction  harmonized,  with  a 
view   to  attain   uniform   results. 

We  hold  the  reorganization  of  the  libraries  in  the  Republic  and 
the  creation   of  popular  circulating  libraries  to  be  a  public  need. 


VII 
ADMINISTRATION    OF    JUSTICE 

WHEN  the  courts  of  justice  are  powerless  to  safeguard  the 
rights  of  the  individual  against  the  corruption  of  wealth, 
the  influence  of  the  powerful,  and  the  political  interest  of  the 
government,  society  becomes  profoundly  agitated,  a  fact  which 
paves  the  way  for  angry  protests,  and  for  convulsions  of  reaction. 

Nevertheless,  every  violent  surge  of  emotion  against  in- 
justice provokes  fresh  manifestations  of  injustice.  Revolution 
unleashes  the  basest  passions  and  raises  to  power  those  least 
ready  to  submit  to  the  orderly  and  exacting  processes  of  organ- 
ized justice.  This,  in  turn,-  lays  the  foundation  for  fresh  violent 
outbursts  within  an  endless  cycle  of  anarchical  disorder  and 
ruthless  oppression. 

The  history  of  Mexico  offers  one  of  the  most  convincing 
examples  of  what  we  have  just  said.  No  single  factor,  then, 
would  more  efficaciously  aid  in  the  work  of  pacification  essential 
to  a  program  of  general  reconstruction,  than  a  policy  firmly  and 
honestly  aimed  at  making  justice  effective;  for  nothing  would 
so  tend  to  avoid  fresh  periods  of  immorality  and  violence,  as  the 
feeling  of  solidarity  created  in  the  minds  of  the  people  by  the 
conviction  that  each  of  their  number  is  to  enjoy  full  guarantees 
in  the  exercise  of  his  fundamental  rights. 

This  subject  is  too  vast  to  be  treated  in  full  here.  Our 
political  organization  calls  for  at  least  two  classes  of  courts  of 
justice,  each  functioning  within  its  proper  sphere.  The  constitu- 
tion of  the  one  and  of  the  other  has  basic  defects,  the  outcome 
of  our  backward  social  development,  of  tradition  and  of  routine. 
Their  organic  laws,  although  predominantly  satisfactory,  are, 
nevertheless,  undesirable  in  many  ways.  They  encourage  trickery, 
blight  the  judicial  sense,  and  render  justice  inaccessible  to  the 
great  majority  of  Mexicans.  From  this  point  of  view,  we  may 
say  that  our  procedure,  and  much  of  our  substantive  law  are 
based  on  a  social  condition  which  only  exists  in  the  case  of  a 
small  minority  of  the  population,  and  take  no  account  of  the 
social,  economic  and  intellectual  condition  of  the  great  mass 
of  the  people. 


—  44  — 

A  revolution  which,  like  the  "constitutionalist"  revolution, 
pronounced  judgment  on  the  past,  ought  to  have  taken  note  of 
the  evils  we  have  just  outlined;  but  it  failed  to  do  so 
lamentably.  Profoundly  respectful  of  our  traditions  and  our 
history,  we  none  the  less  yearn  for  an  era  of  progress;  but  this 
cannot  be  achieved  through  the  old  structure  of  our  laws.  We, 
therefore,  advocate  a  sweeping  revision  of  our  civil  and  penal 
statutes  and  procedure,  the  aim  of  which  shall  be  to  realize  the 
ideal  of  social  justice:  equal  opportunities  for  all. 

We  denounce  as  one  of  the  most  regrettable  defects  of  our 
judicial  organization  the  method  by  which  the  highest  court  in 
the  land  functions,  organized  as  it  is  in  the  manner  of  a  parlia- 
mentary body,  With  a  variable  quorum.  Like  every  tribunal, 
the  membership  of  the  Federal  Supreme  Court  should  be  fixed, 
if  its  resolutions  are  to  have  weight  and  create  real  jurisprudence. 

Before  the  Supreme  Court  there  come  very  year  from  five 
to  six  thousand  cases;  and  this  number  will  steadily  increase  as 
our  national  life  becomes  more  complicated.  For  the  same 
reason,  the  nature  of  the  cases  tends  to  become  more  and  more 
diversified.  Hence  it  is  essential  that  the  labors  of  the  Court 
be  divided  into  sections  (solas),  on  the  understanding,  however, 
that  the  full  court  shall  intervene  to  state  the  law  whenever  the 
decisions  of  the  sections  shall  conflict. 

Several  systems  for  choosing  the  personnel  of  the  Supreme 
Court  have  been  tried  in  Mexico.  In  the  assembly  that  framed 
the  Queretaro  constitution  there  were  ardent  champions  of  the 
popular  election  of  judges,  that  is  to  say,  by  the  outgrowth  of 
political  contests.  After  much  labor,  this  great  truth  forced  its 
way  forward:  that  the  electorate  is  not  qualified  to  pass  upon 
the  legal  learning  and  moral  qualities  of  judges.  The  vindica- 
tion of  this  principle  should  not  be  lost,  although  we  must 
condemn  the  method  of  designation  established  by  the  Queretaro 
constitution  for  certain  judicial  authorities.  It  will  suffice  to  cite 
the  lamentable  result  in  personnel  which  this  method  of  selection 
has  borne,  to  justify  the  view  that  the  fitting  body  for  the  selec- 
tion of  judges  is  not  Congress,  not  the  Lower  House  whose 
every  act  is  inspired  in  political  passion  and  partisan  bias.  This 
system  has  brought  about  not  alone  the  designation  to  the 
Supreme  Bench  of  persons  unworthy  of  the  loftiest  judicial  rank, 
but  is  responsible  for  the  painful  spectacle  of  three  Justices 
who,  although  distinguishing  themselves  for  learning,  independ- 
ence and  integrity  during  the  first  part  of  the  Carranza  regime, 


—  45  — 

yet  failed  to  receive  the  merited  honor  of  reelection,  merely  be- 
cause they  did  not  have  the  necessary  political  backing. 

This  illuminating  experiment  obliges  us  to  condemn  the 
system  established  by  the  Queretaro  constitution,  and  to  recom- 
mend another  analogous  to  those  followed  in  other  countries 
successfully. 

And  yet,  however  wise  the  designation  of  a  judge,  the 
desideratum  of  a  sound  administration  of  justice  will  not  be 
attained,  if  he  is  not  made  a  respectable  and  responsible  free 
agent:  free  from  the  fear  of  sacrifice  if  he  does  not  yield  to  the 
demands  of  those  in  power;  free  from  the  menace  of  poverty- 
stricken  old  age,  after  the  best  years  of  his  life  have  been  spent 
on  the  bench. 

We  mean  that,  in  the  first  place,  the  judicial  functionary 
should  be  permanent.  Permanency  is  an  essential  condition  of 
independence,  a  guarantee  of  integrity  and  a  basis  of  public 
confidence.  The  judicial  official  should  not  be  removed  except: 
(1)  for  wrong-doing  established  after  impeachment  and  convic- 
tion in  due  course,  or  (2)  through  promotion  to  a  higher  office. 

If  our  judicature  is  made  a  career,  in  which  merit  and 
service  are  counted  upon  to  reach  the  highest  positions,  with 
compensation  in  accord  with  the  social  status,  there  may  be 
some  hope  that  the  judiciary  in  Mexico  may  attract  the  better 
type  of  man.  Today  he  avoids  this  service,  so  as  not  to  be 
exposed  to  the  jeopardy  of  uncertain  employment. 

But  permanency  alone  will  not  suffice  to  safeguard  officials 
who  devote  their  lives  exclusively  to  the  service  of  the  judicature, 
if  they  are  to  be  left  exposed  to  accidents,  ill-health  or  abandon- 
ment in  old  age.  The  law  should  provide  for  all  these  contin- 
gencies. It  should  also  establish  the  rules  to  make  the  responsi- 
bility of  judges  effective,  correcting  their  mistakes  and  punishing 
their  offenses. 

Compelled  through  exigencies  of  space  to  limit  ourselves 
to  general  observations  on  this  important  matter,  we  shall  en- 
deavor in  the  following  conclusions  to  set  forth  briefly  our 
views  on  the  problem: 

We  recognize  that  one  of  the  evils  which  most  deeply  affect 
Mexico  is  its  vicious  administration  of  justice:  vicious  because  of 
the  technicalities  of  judicial  procedure;  because  of  the  spirit  of  many 
of  our  substantive  laws  which  do  not  recognize  the  great  social 
inequalities  which  unfortunately  characterize  the  life  of  our  people; 
and,  lastly,  because  of  the  lack  of  culture  and  independence  of 
the  judges. 


—  46  — 

We  can  do  no  more  here  than  to  recommend,  in  general  terms, 
the  early  revision  of  our  laws,  both  those  that  define  rights  as  well 
as  those  that  relate  to  procedure. 

Such  a  revision  ought  to  be  inspired  in  the  modern  concept  of 
social  justice  and  in  the  necessity  of  making  the  civil  courts,  today 
virtually  closed  to  the  poor  and  the  outcast,  accessible  to  the  largest 
possible  number. 

In  penal  procedure  the  inhuman  practice  of  solitary  confinement 
(incomunicacion)  ought  to  be  wholly  proscribed,  as  well  as  every 
form  of  compulsion  designed  to  obtaining  a  confession  from  the  ac- 
cused. Freedom  on  bail  should  be  the  privilege  of  every  accused, 
and  ought  only  to  be  suspended  when  the  offense  with  which  he  is 
charged  is  punishable  with  a  penalty  of  ten  years  imprisonment,  or 
with  capital  punishment. 

When  the  offense  is  not  punishable  with  imprisonment  or  death, 
the  accused  should  not  be  detained  at  any  time. 

The  Federal  Supreme  Court  should  funtion  in  its  true  character 
as  a  tribunal,  with  fixed  membership;  and  not  as  a  parliamentary 
body  with  a  variable  quorum.  Cases  coming  within  its  jurisdiction, 
including  those  of  the  constitutional  cases  of  amparo,  should  be 
distributed  among  its  members  arranged  in  sections  (salas) ;  but 
the  full  bench  should  assume  such  responsibilities  as  may  be  neces 
sary  to  obtain  a  uniform   jurisprudence. 

The  Justices  of  the  Supreme  Court  should  be  chosen  by  the 
Senate  from  lists  of  three  names  each,  submitted  by  the  President. 
The  resignations  of  these  justices  should  be  passed  upon  by  the 
Senate.  The  Circuit  and  District  judges  to  be  chosen  by  the  Supreme 
Court   sitting    as   a   full   bench. 

The  judges  of  the  Superior  Courts  of  the  Federal  District  and 
Territories  should  be  chosen  in  the  same  way  as  provided  for  those 
of  the  Federal  Supreme  Court.  These  Superior  Courts  to  designate 
the  judges  under  their  jurisdiction. 

The  states  should  adopt  in  the  designation  of  local  justices 
and  judges  a  procedure  analogous  to  that  outlined  above,  the  former 
to  be  designated  by  the  respective  legislature  on  the  proposal  of 
three  names  submitted  by  the  Governor,  and  the  latter  by  ap- 
pointment of  the  Superior  Tribunal. 

Every  judicial  functionary  ought  to  hold  office  indefinitely, 
and  only  be  suspended  or  removed  as  the  result  of  impeachment. 
The  Justices  of  the  Supreme  Court  should  be  subject  to  a  special 
impeachment  procedure  in  the  same  manner  as  provided  for  other 
high  federal  officials.  The  laws  on  impeachment,  admittedly  deficient, 
should  be  revised,  so  that  judicial  responsibility  should  not  be  a 
farce,  as  it  has  heretofore  been. 

The  law  ought  to  prescribe  the  terms  under  which  the  judicial 
functionaries  are  to  be  pensioned  for  old  age  or  disability,  and  the 
amount  they  should  receive  in  such  event.  The  compensation  to 
be  paid  to  judicial  functionaries  should  be  sufficiently  large  to  permit 
them  to  live  with  the  comfort  which  their  respective  positions 
require. 


VIII 
RAILROAD     POLICY 

IT  DEVOLVES  in  great  measure  upon  the  Mexican  Govern- 
ment to  solve  the  complex  problem  that  our  railroads  now 
present,  not  alone  because  it  is  the  duty  of  the  State  to  see  that 
an  essential  public  service,  such  as  transportation,  meets  the 
needs  of  the  country  and  serves  as  a  direct  factor  of  progress, 
but  also  because  in  our  case  the  government  has  serious  con- 
tractual obligations  toward  the  railroads,  in  addition  to  the 
responsibilities  growing  out  of  the  state  of  war  and  disorder  that 
has  prevailed  for  the  last  ten  years  in  Mexico. 

Only  a  general  plan  of  railroad  rehabilitation  can  be  under- 
taken here.  In  the  first  place,  it  is  necessary  to  act  on  a  premise 
that  has  heretofore  only  been  partly  realized:  that  the  govern- 
ment must  be  able  to  protect  the  lines,  property,  and  rolling 
stock  against  destruction.  So  soon  as  this  result  has  been 
achieved,  the  first  step  in  the  program  of  rehabilitation  should 
consist  in  returning  the  management  of  all  lines  to  their  re- 
spective companies. 

Whatever  be  the  pet  theories  of  economists  and  sociologists 
as  to  the  role  of  the  State  in  the  handling  of  public  services, 
—  and  railroad  transportation  is  one  of  them, —  experience 
shows  that  as  a  general  rule  State  administration  of  railroads 
is  much  inferior  to  that  of  private  initiative.  An  example  of  this 
is  afforded  by  the  American  railroads  during  the  period  when, 
because  of  the  exigencies  of  war,  the  government  took  charge 
of  the  transportation  system  of  the  United  States.  The  failure 
of  this  experiment  in  governmental  administration  cannot  be 
more  eloquent.  As  is  only  natural,  the  Mexican  government  has 
experienced  an  even  greater  failure,  attributable  not  only  to 
the  deficiences  charasteristic  of  every  bureaucratic  organization 
when  it  acts  as  an  industrial  unit,  and  natural  enough  under  the 
peculiar  conditions  of  disorder  obtaining  in  Mexico,  but  also  to 
the  lack  of  integrity  of  high  railroad  officials  and  to  the  abuses 
and  usurpations  of  government  functionaries  and  of  military 
chiefs  in  active  command  of  troops.  Corruption  has  filtered 
through  all  ranks;  the  railroads  have  been  a  source  of  immoral 


—  48  — 

speculation  and  illicit  personal  profit.  Generals  and  other  favorites 
secure,  or  used  to  secure,  traffic  concessions  even  in  the  shame- 
less form  of  rebates  on  rates  paid  by  the  public.  In  a  word,  it 
may  be  said  that  the  railroads  of  Mexico  considered  as  a  branch 
of  public  administration  are,  next  to  the  army  and  the  courts, 
the  most  corrupt  and  inefficient  official  organization. 

In  any  re-organization  of  the  railroad  system  known  as  the 
"National  Railways  of  Mexico",  in  which  the  Mexican  Govern- 
ment is  a  stockholder,  the  interests  of  other  shareholders,  re- 
presenting approximately  fifty  per  cent  of  the  stock,  must  be 
taken  into  account.  Still  less  will  it  be  possible  to  ignore  the 
bond  and  security  holders,  who  rely  on  the  guarantee  of  several 
mortgages  on  the  lines  and  their  appurtenances. 

These  creditors  are  entitled  to  substantial  claims,  through 
the  failure  to  pay  interest  for  seven  years  or  more  and  through 
the  diminution  of  the  guarantee,  because  of  the  lamentable 
deterioration  of  the  properties  subject  thereto.  The  Mexican 
Government  is  liable  for  all,  or  almost  all,  these  claims,  because, 
in  the  first  place,  it  has  been  directly  operating  the  lines  and 
enjoying  the  proceeds  therefrom;  and  in  the  second  place,  be- 
cause under  former  contracts  it  bound  itself  to  guarantee  the 
capital  of  the  so-called  general  mortgage,  which  may  be  con- 
sidered due  and  payable,  and  which,  without  counting  large 
unpaid  interests,  reaches  the  aggregate  of  320,000,000  pesos 
(160,000,000  dollars). 

It  is  idle  to  assume  that  with  such  a  burden  of  obligations 
and  in  view  of  the  enormous  deterioration  of  lines  and  appurte- 
nances, the  Mexican  Government, —  however  honest  and  com- 
petent we  may  assume  it  to  be, —  can  restore  our  system  of 
National  Lines,  so  that  it  can  fulfill  its  mission.  Furthermore, 
it  is  probable  that  the  day  when  order  is  definitely  restored, 
the  government  will  be  called  upon  to  meet  the  claims  of  mort- 
gage creditors,  who  have  relied  upon  their  contracts  and  who 
will  demand  as  a  condition  precedent  at  least  the  delivery  of 
the  lines,  so  as  to  prevent  their  further  exploitation  with  the  total 
abandonment  of  the  financial  obligations  for  which  they  are 
liable.  This  may  entail  the  loss  of  ownership  of  the  railroads 
for  the  company  owning  them,  and  consequently  the  complete 
cancellation  of  the  shares  which  the  government  possesses  in 
the  company. 

We  should  in  all  fairness  say  that,  however  much  the  public 
may  believe  that  the  interest  acquired  in  the  National  Railways 


—  49  — 

by  the  Diaz  administration  should  be  conserved,  it  is  impossible 
not  to  acknowledge  the  fact  that  this  interest  involves  the  as- 
sumption of  obligations  which  the  country  is  in  no  position  to 
carry,  and  which  was  to  a  large  degree  the  price  of  acquisition. 
The  sacrifice,  therefore,  of  the  shares  representing  this  interest 
would  be  of  small  moment,  if  in  exchange  the  government  could 
successfully  release  itself  from  some  of  the  onerous  guarantees 
it  has  assumed.  Such  a  sacrifice  would,  furthermore,  be  merely 
temporary,  for  the  fact  should  not  be  lost  sight  of  that  these 
railroads  are  subject  to  the  right  of  reversion  after  a  certain 
number  of  years,  and  that,  therefore,  irrespective  of  the  settle- 
ment now  made  with  the  creditors,  the  lines  and  their  appurte- 
nances will  all,  sooner  or  later,  pass  into  the  full  ownership  of 
the  Mexican  Government,  free  of  encumbrances.  The  shares 
acquired  by  the  Diaz  administration  merely  represent,  therefore, 
a  right  of  transitory  duration. 

Consequently,  we  are  of  the  opinion  that  the  Mexican 
Government  should  enter  into  arrangements  with  the  share- 
holders and  bondholders  upon  the  general  terms  to  be  set  forth 
in  the  conclusions  of  this  chapter,  or  on  other  terms  that  may 
be  acceptable,  without  sacrificing  the  honor  of  the  government 
and  without  abridgment  of  the  legitimate  right  which  the  govern- 
ment has  to  intervene  in  matters  of  railroad  transportation,  in 
accordance  with  sound  principles  of  political  economy,  as  pre- 
scribed in  the  railroad  law  and  stipulated  in  the  franchises. 

It  is  also  to  be  borne  in  mind  that,  whatever  solution  may 
be  reached,  the  government  will  retain  the  right  to  take  over, 
in  whole  or  in  part,  the  administration  of  the  railroads  of  Mexico, 
whenever  required  by  the  maintenance  of  order  or  by  the 
military  defense  of  the  country. 

In  the  matter  of  general  policy,  we  believe  that  the  govern- 
ment should  promote  the  construction  of  more  railroads  feeding 
the  large  trunk  lines,  and  the  construction  of  other  lines  es- 
tablishing contact  between  important  portions  of  Mexico  now 
somewhat  isolated  because  of  a  lack  of  railroads. 

We  hold  the  view  that  the  Mexican  Government  should 
adopt  at  this  time  a  railroad  policy  based  on  the  following 
considerations: 

The  Mexican  Government  should  return  to  their  owners,  at  the 
earliest  possible  moment,  the  railroad  lines  and  their  appurtenances 
that  it  has  seized,  and  negotiate  the  necessary  arrangement  for  the 
payment,  in  instalments,  of  responsibilities  directly  growing  out  of  the 


50 


seizure  and  destruction  of  fixtures  and  rolling-stock,  in  so  far  as  these 
responsibilities  may  be  legally  imputable  to  the  government.  With 
regard  to  the  lines  comprising  the  National  Railways  system,  the 
government  should,  furthermore,  bring  about  the  reorganization  of 
the  company,  granting  the  bond-holders  a  direct  participation  there- 
in, even  though  it  be  at  the  cost  of  the  temporary  or  permanent 
sacrifice  of  the  stock  which  the  government  represents  in  the  com- 
pany. This,  however,  should  only  be  done  in  exchange  for  sub- 
stantial advantages,  among  them  that  of  the  release  of  the  Nation 
in  the  future  from  the  guarantees  securing  the  payment  of  mort- 
gages whether  by  way  of  principal  or  interest.  As  to  liabilities 
already  incurred  through  existing  guarantees,  we  believe  that  the 
government  should  procure  their  liquidation,  as  far  as  possible,  in 
exchange  for  the  extension  of  the  duration  of  the  franchises,  but 
maintaining,  at  all  costs,  the  principle  of  reversion  in  the  favor  of 
the  Nation,  as  provided  in  the  Railroad  Law,  and  the  govern- 
mental  privilege    of   free   postal    transportation. 

No  pains  should  be  spared  to  build  railroads  connecting  the 
peninsulas  of  Yucatan  and  Lower  California  with  the  railroad 
systems  of  the  country.  So,  too,  a  survey  should  be  undertaken 
of  the  feeders  of  the  trunk  lines,  the  construction  of  which  shall 
serve  to  develop  those  sections  of  the  Republic  better  susceptible  to 
growth,  because  of  conditions  of  population  and  nature  of  products. 
On  the  completion  of  these  surveys,  the  building  of  such  tributary 
lines  should  be  subsidized  or  otherwise  encouraged. 

Because  of  the  strategic  and  political  importance  of  the  Te- 
huantepec  Railroad,  the  Nation  should  retain  the  ownership  of  this 
line;  but  its  operation  might  be  contracted  for,  during  a  limited 
period,  with  some  private  enterprise,  either  in  the  form  of  a  partner- 
ship or  in  any  other  form  deemed  advantageous. 

The  Commission  On  the  Regulation  Of  Rates  should  be  re- 
established, but  so  reorganized  as  to  be  not  merely  an  advisory 
board,  but  empowered  to  approve  rates  and  even  enforce  them, 
basing  its  action  on  the  interests  of  the  companies  and  of  the  public. 

Inasmuch  as  the  Mexican  railroad  personnel  has  given  proof  of 
its  efficiency,  all  railroad  companies  operating  in  Mexico  should  be 
required  to  have  not  less  than  ninety  per-cent  of  their  employees 
respectively  recruited  from  among  Mexican  railroad  men. 


IX 
NATIONAL    ARMY 

A  DISCUSSION  as  to  whether  the  dissolution  of  the  Federal 
Army  carried  out  by  the  Carranza  revolution  was  or  was 
not  a  wise  measure  is  out  of  place  here.  The  fact  is  that  the 
old  military  organization  of  the  country  has  disappeared  and 
that  the  revolutionary  forces,  which  have  taken  its  place,  are 
far  from  deserving  the  title  of  "National  Army".  The  lack  of 
military  and  civil  training  of  almost  all  their  officers,  the  no- 
torious immorality  of  certain  of  them,  and  the  lack  of  discipline 
of  the  rank  and  file  force  upon  us  the  painful  conclusion  that 
Mexico  has  not  an  army  that  can  be  trusted  to  uphold  our  insti- 
tutions, and  defend  the  integrity  of  the  republic. 

The  government  emanating  from  the  revolution  closed  the 
Military  College  of  Chapultepec  (deserving  respect  for  its 
glorious  traditions  if  for  nothing  else),  and  substituted  for  it 
an  elementary  school  which  can  train  only  officers  of  a  very 
inferior  type.  At  the  beginning  of  the  present  year,  the  old 
College  was  reopened,  and  certain  officers  of  the  extinct  Federal 
Army  included  among  its  teaching  staff.  But  the  curriculum 
adopted  is  so  deficient  that  many  years  must  elapse  before  the 
officers  trained  under  these  new  conditions -can  attain  the  intel- 
lectual development  which  the  military  career  demands  today. 
Again,  the  systematic  exclusion  of  almost  all  officers  of  the  old 
regular  army  deprives  the  new  army  of  the  valuable  services, 
—  for  which,  during  many  years,  a  substitute  cannot  be  found,  — 
of  officers  familiar  with  the  art  of  war,  who  have  devoted  the 
best  years  of  their  life  to  the  career  of  the  soldier. 

Everything  is  still  to  be  done  in  this  field;  but  it  would  be 
unwise  to  recommend  that  the  army  be  reconstituted  along  the 
old  lines,  the  defects  of  which  we  all  readily  admit.  A  detailed 
examination  of  the  subject  is,  however,  not  feasible  here.  We 
shall  confine  ourselves  to  a  presentation  of  the  principles  which 
should  form  the  basis  of  the  organization  of  a  truly  national 
army,  namely,  that  it  is  the  duty  of  every  citizen  to  defend  the 
republic  and  uphold  its  institutions.  Accordingly,  every  Mexican 
physically  fit  to  bear  arms  should  form  part  of.the  army.    In 


—  52  — 

other  words,  military  service  should  be  universal  and  compulsory. 

Armies  in  Mexico  cannot  be  formed  of  volunteers,  except 
in  times  of  rebellion  when  serving  revolutionary  factions.  By 
the  side  of  those  who  in  good  faith  fight  for  a  principle,  are  to 
be  found  bandits,  outcasts,  and  adventurers  of  every  class  and 
condition.  It  is  almost  a  superhuman  task  to  convert  these 
hordes  into  a  disciplined  and  regularly  constituted  army.  The 
different  governments  are  accordingly  bound  to  resort  to  arbi- 
trary recruiting  (leva),  more  or  less  disguised  by  the  name 
of  compulsory  service;  and  so  the  ranks  are  swelled  by  drunkards, 
thieves  and  vagrants,  to  say  nothing  of  scores  of  unfortunates 
who  are  the  victims  of  the  caprice  of  those  in  authority.  The 
collapse,  therefore,  of  the  regular  army  whenever  the  country 
has  passed  through  a  crisis  is  not  surprising;  while  the  corps 
of  officers,  among  whom  there  have  been  many  honorable  and 
cultured  men,  have  been  powerless  to  prevent  the  disaster. 

An  army  formed  of  men  who  are  fulfilling  a  patriotic  duty, 
not  of  men  forced  into  service,  who  are  only  held  together  by 
the  rigor  of  stern  discipline,  will  be  the  best  guarantee  of  peace 
and  the  stability  of  governments.  This  cannot  be  achieved  with 
the  armies  we  now  have.  Our  history  proves, —  and  recent 
events  have  merely  confirmed  it,  —  that  governments  in  Mexico 
fall  more  readily  at  the  hands  of  their  own  soldiers  than  by 
the  onrush  of  revolution;  and  from  this  point  of  view  it  seems 
needless  to  emphasize  the  importance  of  establishing  a  method 
of  recruiting  which  shall  put  an  end  to  the  tyrannical  dictation 
of  the  military  caste  over  the  civilian  population. 

Many  persons  will  surely  think  it  impossible  to  organize 
an  army  in  which  men  of  education  and  of  habits  so  diverse 
as  are  to  be  observed  among  our  so-called  social  classes  must 
live  in  the  intimacy  of  military  service.  This  objection,  however, 
far  from  being  a  serious  reason  for  abandoning  the  only  system 
of  forming  an  army  such  as  we  propose,  may  be  minimized  by 
various  methods,  into  the  details  of  which  we  cannot  enter  here. 

Regional  recruiting,  the  establishment  of  a  system  of  volun- 
teer service  of  six  months  or  one  year  for  young  men  who  by 
reason  of  their  training  and  culture  are  better  qualified  than 
the  artisan  and  the  peon,  and  other  special  arrangements,  will 
serve  to  diminish  the  disadvantages  previously  outlined,  and 
to  overcome  the  repugnance  of  class,  so  detrimental  to  the  con- 
solidation of  a  democracy.    Universal  service  will  be  the  most 


—  S3  — 

efficacious  means  of  reducing  to  a  common  level  those  inequalities 
that  are  incompatible  with  a  regime  of  political  liberty. 

Military  instruction  should  be  resumed  with  a  curriculum 
so  disposed  as  to  form  permanent  officers  out  of  the  young 
men  desiring  to  enter  the  career  of  arms.  There  should  likewise 
be  instituted  a  body,  which  we  have  never  had  in  Mexico,  namely, 
a  General  Staff  with  powers  similar  to  those  of  the  General  Staff 
of  the  principal  foreign  armies.  Again,  there  should  be  organized 
a  corps  of  military  administration  which  shall  eliminate  from 
our  armies  the  women  camp  followers  (soldaderas)  who,  in  ad- 
dition to  their  disadvantages,  and  the  lamentable  backwardness 
they  reveal,  make  us  the  butt  of  all  writers  on  this  subject.  The 
Secretary  of  War  should  be  a  political  appointee  with  purely 
administrative  duties  and  not  the  supreme  head  of  the  army, 
as  he  has  always  been  in  Mexico. 

If  we  can  succeed  in  forming  an  army  along  the  lines  thus 
roughly  outlined,  pretorian  armies  will  cease  to  exist;  and  not 
only  a  work  of  incalculable  political  significance  will  have  been 
achieved,  but  a  real  task  of  civilization  will  also  have  been  ac- 
complished. The  illiterate  youth  periodically  entering  the  service 
will  leave  it  not  only  having  gained  the  rudiments  of  culture, 
but  also  well  disciplined,  with  an  understanding  of  what  is 
meant  by  dignity  and  civic  duties.  They  will  be  vigorous  in 
body,  thanks  likewise  to  the  strenous  military  life.  The  barracks 
will  cease  to  be  what  it  is  today,  a  place  of  confinement  wherein 
the  soldier  consumes  his  soul  in  despair  and  his  body  in  vice, 
but  a  school  of  reform,  a  nursery  of  citizens  and  patriots.  To 
this  end  the  traditional  type  of  Mexican  barracks  should  be 
abandoned  and  gradually  replaced  by  military  cantonments 
outside  of  large  towns. 

There  will  always  be  volunteer  soldiers,  enlisted  for  long 
terms,  from  whom  may  be  drawn  the  non-commissioned  per- 
sonnel. These,  together  with  the  officers,  will  form  the  skeleton 
for  the  training  of  the  groups  of  recruits  periodically  renewed. 
There  should,  likewise,  be  a  roster  of  professional  officers;  but 
the  bulk  of  the  army  should  be  drawn  from  all  classes. 

What  we  have  said  of  the  army  is  applicable,  in  principle, 
to  the  navy.  Recruiting  for  this  branch  of  the  service  should  be 
among  the  sea-faring  element  in  our  population;  and  in  addition 
to  the  active  personnel,  there  should  be  reserves.  The  organiza- 
tion and  curriculum  of  the  Naval  School  should  be  adapted  to 
the  needs  of  the  country. 


—  54  — 

Still  another  problem  is  to  be  solved  in  the  reorganization 
of  our  army.  There  are^many  generals  and  officers  of  the  old 
Federal  Army,  of  the  Garranza  troops,  of  the  "Convention" 
forces,  of  the  Zapatistas  and  several  other  factions,  many  of 
whom;  would  like  to  belong  to  the  army.  It  is  not  advisable  to 
ignore  these  men.  In  any  program  of  reconstruction,  all  available 
material  must  be  used.  Our  recommendations  on  this  topic  will 
show  how  we  regard  this  matter. 

In  a  word,  the  army  cannot  fulfill  its  high  purpose  until  it 
is  purged  of  the  vices  that  have  allowed  it  to  become  an  instru- 
ment of  ambitious  pretorians  and  to  act  as  a  political  group 
making  and  destroying  governments,  in  disregard  of  military 
honor  and  the  institutions  of  the  country. 

It  is,  of  course,  to  be  understood  that  the  following  recom- 
mendations are  to  be  given  effect  with  due  regard  to  the  finan- 
cial resources  of  the  country: 

The  national  army  ought  to  be  composed  of  active  and  reserve 
forces,  the  former  consisting  of  men  between  eighteen  and  twenty 
years  of  age,  in  such  numbers  and  for  such  terms  of  service  as 
the  law  may  determine;  the  reserve  forces  consisting  of  citizens 
who  have  seen  active  service. 

The  Military  College,  the  Naval  School,  and  such  other  institu- 
tions of  military  training  as  may  be  needed,  ought  to  be  reorganized 
or  established,  as  our  resources  permit  and  our  national  needs 
require.  Young  men  desiring  to  follow  the  career  of  arms  ought  to 
enter  these  establishments  and  graduate  as  officers  of  the  respective 
branches  of  the  service.  Young  men  following  civil  careers  or 
having  certain  civil  training  might  remain  in  active  service  only 
such  time  as  is  strictly  necessary  to  acquire  the  technical  knowledge 
to  enter  the  branch  of  the  service  in  which  they  have  been  trained 
as  reserve  officers. 

Non-commissioned  officers  shall  be  chosen   from   among  those 
.    persons  who  have  voluntarily  enlisted  for  long  terms. 

A  General  Staff  shall  be  organized,  as  also  a  corps  of  military 
administration.  The  duties  of  the  Secretary  of  War  shall  be  solely 
politico-administrative. 

An  effort  should  be  made  to  substitute  the  barracks  for  military    > 
,  cantonments  outside  of  populated  centers,  and  the  service  so  organ- 
ized as  to  promote  the  morat  and  intellectual  advancement  and  the 
physical  development  of  the  young  men,  and  to  be,  at  the  same 
time,  a  school  of  civics  and  love  of  country. 

The  following  rules  shall  be  observed  in  determining  the  petitions 
for  admission  into  the  army  filed  by  those  who  have  obtained 
rank  in  the  forces  of  the  various  revolutionary  factions  or  in  the 
former  federal  army: 

A  —  All  ranks  from  colonel  upward  that  have  been  ratified 
by  a  legal  or  de  facto  Senate  to  be  recognized; 


55 


B  —  Ranks  inferior  to  that  of  colonel  that  have  been  conferred 
by  any  government  which  shall  have  functioned  in  the  Republic, 
either  in  law  or  in  fact,  to  be  likewise  recognized; 

C  —  Persons  holding  military  ranks  not  comprised  within  either 
of  the  foregoing  classes  are  to  file  petitions  before  courts  of  honor 
composed  of  persons  of  recognized  integrity  and  efficiency  named 
by  the  Government. 

These  courts  shall  render  their  decisions  as  their  consciences 
may  dictate,  without  taking  into  account  considerations  of  a  tech- 
nical order,  but  rather  weighing  the  moral  qualities  of  the  applicant, 
the  good  faith  with  which  he  defended  the  cause  he  embraced,  and 
the  practical  ability  he  demonstrated  while  in  service. 


X 
LABOR    LEGISLATION 

ANVONE  not  acquainted  with  the  history  of  the  labor  problem 
in  Mexico  will  be  surprised  at  the  importance  ascribed  to 
it  in  a  country  which  has  not  yet  reached  the  industrial  stage, 
and  where  the  laboring  element  in  the  technical  sense  does  not 
amount  to  two  per  cent  of  the  total  population.  This  phenome- 
non presents  its  most  striking  manifestation  in  the  fact  that  the 
constitution  itself  contains  a  series  of  labor  provisions  embody- 
ing some  of  the  most  advanced  theories  of  modern  socialism. 
All  these  measures,  we  repeat,  are  for  the  benefit  of  a  slender 
minority  which,  without  effort  or  sacrifice,  has  won  victories, 
some  of  which  have  not  yet  been  achieved  by  the  working 
classes  of  highly  industrialized  countries,  after  more  than  half 
a  century  of  constant  effort. 

The  true  social  problem  of  Mexico  is  not  that  of  our  250,000 
or  300,000  industrial  workers,  but  that  of  the  millions  of  our 
agricultural  laborers.  Failing  to  realize  that  the  workers  who 
directly  produce  the  necessaries  of  life  for  our  population,  — 
and  who  are  the  most  neglected,  —  should  receive  special  con- 
sideration, the  legislators  of  Queretaro  favored  the  industrial 
class,  granting  them  privileges  which  often  serve  as  an  incentive 
to  destructive  agitation.  On  the  other  hand,  little  or  nothing 
practical  did  they  accomplish  for  the  former;  and  although  the 
constitutional  text  ordains  that  all  provisions  on  this  topic  should 
apply  to  all  forms  of  labor,  it  is  axiomatic  that  the  problems  of 
agricultural  labor  differ  widely  from  those  of  the  industrial 
worker.  The  latter,  and  only  the  latter,  appears  to  have  deserved 
the  attention  of  the  framers  of  the  much-vaunted  constitution, 
who  gave  preferential  consideration  to  a  restricted  problem  of 
small  relative  importance,  rather  than  to  a  tremendous  problem 
of  a  general  nature. 

And  yet  this  attitude  may  be  explained.  The  Queretaro 
convention  was  not,  either  in  origin  or  in  personnel,  a  body 
representing  the  Mexican  people,  while  the  low  standard  of 
intellectuality  of  the  great  majority  of  its  members  made  it  pos- 
sible for  a  handful  of  labor  agitators  and  academicians  to  impose 


—  58  — 

their  will,  and  to  embody  in  the  constitution  their  favorite 
theories,  some  of*  which  the  Mexican  working-man  had  not  even 
dreamed  of  securing. 

Having  won  this  spurious  victory,  the  apostles  of  socialism 
undertook  an  effective  campaign  of  propaganda  and  organization 
among  the  working  classes,  and  as  a  result,  have  produced  the 
intense  activity  of  the  diminutive  Mexican  industrial  world. 

The  foregoing  remarks  should  not  be  construed  as  a  con- 
demnation of  the  legitimate  achievements  won  for  the  workers, 
even  though  they  are  due  to  the  artificial  situation  above  de- 
scribed. On  the  contrary,  we  believe  that  certain  of  the  principles 
thus  won  are  only  in  compliance  with  the  imperative  demands 
of  social  justice,  and  that  it  is  important  that  they  should  not 
be  lost  through  the  natural  reaction  they  awaken  among  the 
capitalistic  classes.  We  shall  proceed  to  make  a  rapid  examina- 
tion of  the  labor  provisions,  in  order  to  present  our  conclusions. 

Article  5  of  the  Queretaro  constitution  wisely  extended  the 
constitutional  guarantee  of  freedom  of 'contract  to  work  contained 
in  Article  5  of  the  constitution  of  1857.  We  have  only  one 
objection  to  raise  to  the  new  text.  We  refer  to  the  pro- 
hibition of  temporary  surrender  of  the  right  to  exercise  a  certain 
profession,  or  engage  in  a  branch  of  industry  or  commerce. 
Under  this  inhibition,  no  one  having  peculiar  qualifications  can 
bind  himself  for  a  fixed  time  to  devote  his  skill  to  a  definite 
industry.  The  theatre  manager  or  the  manufacturer  who  con- 
tract for  a  certain  period  the  services  of  an  actor  or  chemist 
cannot,  under  this  article,  prevent  the  actor  or  the  chemist  from 
serving  a  competitor.  This  is  manifestly  contrary  to  reason 
and  to  equity,  and  is,  furthermore,  in  conflict  with  accepted 
practices. 

With  this  absurd  restriction  eliminated,  we  do  not  hesitate 
to  recommend  the  incorporation  of  Article  5  of  the  constitution 
of  1917  into  that  of  1857. 

The  other  provisions  of  the  constitution  of  Queretaro  relat- 
ing especially  to  labor  are  to  be  found  in  Article  123.  Not  a 
single  one  of  them  should  rationally  appear  in  the  political 
constitution  of  the  Republic.  The  very  beneficiaries  of  the 
precepts  may  be  prejudiced  by  the  difficulty  in  amending  them, 
should  experience  warrant  amendment.  A  constitutional  text  can 
only  be  changed  after  complying  with  numerous  requisites,  not 
always  easy  to  satisfy.  '; 

Again,  inasmuch  as  a  great  deal  of  this  labor  legislation 


—  59  — 

is  an  experiment,  subject  to  changes  flowing  from  conditions  of 
climate,  habits  of  the  people,  class  of  industries,  and  several 
other  factors,  the  most  reasonable  arid  expedient  step,  —  and  in 
fact  the  only  step  in  harmony  with  our  political  system,  —  would 
have  been  for  each  State  to  enact  its  own  labor  legislation  in 
consonance  with  the  stage  of  its  industrial  development,  without 
being  compelled  to  follow  the  insuperable  restrictions  of  a 
constitutional  text. 

We  do  not  hesitate,  then,  to  say  that  the  inclusion  in  the 
political  constitution  of  Mexico  of  the  series  of  principles  con- 
tained in  Article  123  of  the  constitution  of  Queretaro  is  legally 
absurd,  and  contrary  to  the  very  social  interest  sought  to  be 
benefited. 

For  this  reason,  and  for  the  sake  of  brevity,  we  shall  omit 
a  detailed  analysis  of  Article  123.  We  have  already  stated  that 
some  of  its  precepts  are  laudable,  and  that  others  are  either 
anti-economic  or  unjust.  Still  others  we  hold  to  be  merely 
ludricrous, —  such  as  that  providing  that  working  women  may 
nurse  their  children  for  two  periods  of  onehalf  hour  each  during 
the  working  day, —  or  immoral,  as  that  granting  exceptional 
privileges  to  working  women  by  reason  of  maternity,  without 
distinguishing  between  those  that  are  married  and  those  that 
are  not,  thereby  promoting  illicit  unions  and  a  relaxation  of 
morals  in  shop  or  factory. 

In  the  conclusions  which  follow  we  shall  set  forth  the 
principles  which,  in  our  judgment,  should  more  urgently  be 
taken  into  account  by  the  Federal  Congress  and  State  legisla- 
tures, within  their  respective  jurisdictions,  in  the  enactment  of 
laws  governing  the  relations  between  capital  and  labor: 

In  labor  legislation  the  constitution  should  confine  itself  to 
establishing  as  a  right  of  man  freedom  in  the  exercise  of  all  lawful 
activities,  without  other  limitations  than  those  required  by  the  public 
interest.  We  recommend  the  definitive  adoption  of  the  text  of 
Article  5  of  the  constitution  of  Queretaro  which  assures  this  funda- 
mental right,  except  in  so  far  as  this  text  encroaches  upon  the  liberty 
of  renouncing,  by  agreement  and  for  a  limited  period,  the  exercise 
of  a  certain  profession,  industry,  or  trade. 

In  view  of  the  conditions  peculiar  to  industrial  labor,  we  believe 
that  the  provisions  relating  to  this  class  of  work  should  not  be  the 
subject  of  scattered  precepts  of  the  civil  code,  but  should  be  in- 
corporated into  special  legislation.  In  no  event,  should  these  provisions 
form  part  of  the  Federal  or  State  constitutions. 

We  recognize  that  the  working  classes  should  be  guaranteed  in 
the  exercise  of  lawful  means  of  defending  their  collective  interests, 


60  — 


among  such  being  peaceful  strike,  the  organization  into  unions 
and  syndicates,  and  the  right  to  deal  with  capital  through  authorized 
labor  representatives.  On  the  other  hand,  the  law  will  have  to  re- 
cognize the  correlative  right  of  employers  to  engage  workmen  not 
affiliated  with  unions  or  syndicates,  and  at  any  time  to  suspend 
operations,  provided  this  is  not  done  maliciously  or  in  violation  of 
labor  contracts. 

The  law  should  not  recognize  the  right  to  strike  in  enterprises 
of  a  public  service  character  or  in  governmental  employment.  Ac- 
ceptance of  work  in  these  classes  of  labor  involves  the  relinquishment 
of  the  right  to  strike.  The  laws  should  in  these  cases  prescribe  strict 
regulations  to  govern  the  suspension  of  work,  as  a  protection  to  the 
rights  of  the  working  man. 

We  believe  it  necessary  that  the  law  should  establish  especial 
boards  of  conciliations  charged  with  preventing,  and  where  necessary, 
settling  conflicts  between  capital  and  labor;  but  we  do  not  recom- 
mend compulsory  arbitration  except  in  cases  where  the  worker  does 
not  possess  the  right  of  strike. 

The  principle  of  the  eight  hour  day  contained  in  the  Queretaro 
constitution  should  be  incorporated  in  all  labor  legislation. 

We  likewise  advocate  the  complete  suppresion  of  the  "company 
store"  (tienda  de  ray  a),  and  the  prohibition  of  the  payment  of  wages 
in  any  other  medium  than  cash.  We  demand  the  enactment  of  pro- 
visions effectively  to  combat  the  vices  which  are  the  scourge  of  our 
working  classes,  such  as  gambling  and  alcoholism,  and  to  protect 
children  and  women  from  excessive  labor,  as  well  as  from  work  in- 
compatible with  age  and  sex ;  to  impose  upon  employers  the  obligation 
to  maintain  in  factories  and  workmen's  dwellings  the  most  hygienic 
conditions  possible;  to  make  compulsory  the  establishment  of  life 
and  health  insurance;  and,  lastly,  to  promote  habits  of  thrift  through 
the  creation  of  saving  banks,  cooperative  stores  and  other  similar 
organizations. 


XI 


RESPONSIBILITIES    GROWING    OUT    OF    DISORDERS 
IN    MEXICO 

WELL  RECOGNIZED  principles  of  international  law  clearly 
define  under  what  conditions  a  country  which  has  been 
the  theatre  of  domestic  disorder  is  bound  in  law  to  compensate 
the  citizens  of  other  countries  for  damages  incurred  by  them  in 
their  person  or  property.  The  Mexican  Government  must  abide 
by  these  principles  of  law,  into  a  discussion  of  which  it  is  not 
possible  to  enter  here.  It  may  not  attempt  withal  to  avoid  its 
unquestionable  responsibility  nor  evade  legitimate  claims  made 
upon  it. 

The  Carranza  government  adopted  a  false  and  untenable 
position  in  this  regard,  creating  a  species  of  administrative  court 
before  which  all  claims  were  to  be  filed.  Nevertheless,  it  granted 
to  claimants  the  right  to  demand  a  review  of  rulings  of  this 
board  by  a  commission  of  which  one  member  would  be  desig- 
nated by  the  diplomatic  representative  accredited  in  Mexico  by 
the  claimant's  government. 

With  regard  to  the  claims  of  nationals,  it  provided  that  the 
decisions  of  the  Court  of  Claims  would  be  subject  to  review 
in  the  regular  course  of  business  by  the  President  of  the  Republic, 
on  whose  supreme  and  personal  decision  would  depend  the  final 
disposition  of  the  claim. 

It  should  be  noted  that  none  of  the  above  provisions  were 
legislative  enactments,  but  proceeded  from  President  Carranza 
under  the  use  of  dictatorial  "legislative"  powers  which  he  as- 
sumed had  been  conferred  on  him  by  Congress. 

As  was  to  be  expected,  the  citizens  of  certain  countries, 
particularly  of  the  so-called  Great  Powers,  refused  to  submit 
to  the  procedure  above  described;  and  their  attitude  was  ap- 
proved, if  not  suggested,  by  their  respective  governments.  It  is 
futile  to  argue  that  Mexico  can  ever  declare  estopped  from  seek- 
ing relief  otherwise  those  persons  who  refuse  to  resort  to  the 
procedure  prescribed  by  the  Carranza  government.  Such  a  de- 
claration would  be  wholly  nugatory.  Foreign  governments  will 
prosecute    through    diplomatic    channels    the    claims    of    their 


—  62  — 

citizens,  and  the  Mexican  government  will  sooner  or  later  have 
to  admit  that  it  is  neither  proper  nor  possible  to  decline  to  fulfill 
international  obligations  or  to  refuse  to  adopt  procedure  sanc- 
tioned by  the  practice  of  nations,  including  Mexico  herself. 

Mexico  has  not  once  but  on  several  occasions  accepted 
the  establishment  of  special  boards,  known  by  the  name  of 
Mixed  Commissions,  created  by  diplomatic  conventions  executed 
with  the  governments  of  the  respective  claimants.  These  mixed 
commissions  act  as  judicial  bodies,  and  their  decisions  are  final, 
both  for  the  governments  creating  them  as  well  as  for  the  in- 
dividuals who  file  their  claims  before  such  special  bodies.  This 
precedent  is  binding  on  us;  and  no  reason  can  be  adduced  why 
we  should  not  submit  to  what  is  a  universal  practice  and  what 
has  been  authorized  by  former  Mexican  governments  of  un- 
questionable patriotism  and  respectability. 

It  is  meet  that  the  claims  of  our  own  citizens  should  be 
submitted  for  examination  and  liquidation  to  special  procedure 
provided  by  law,  not  by  the  whim  of  the  Executive;  but  the 
Mexican  Government  lacks  the  means  whereby  to  compel  foreign 
governments  to  abandon,  with  regard  to  their  citizens,  the  system 
that  has  been  applied  in  analogous  situations. 

We  are  not  unaware  of  the  fact  that  the  circumstances  of 
the  present  case  present  peculiarities  which  will  influence  the 
organization  and  operation  of  the  claims  commissions.  In  the 
first  place,  the  question  is  one  not  of  the  claims  of  citizens  of 
a  single  country,  but  of  those  of  numerous  foreigners  of 
various  nationalities.  It  will  likewise  influence  greatly  the  aspect 
of  this  problem  if  we  consider  the  attitudes  that  have  been 
assumed  by  the  different  governments  of  the  world,  to  which 
the  claimants  belong,  with  regard  to  the  internal  affairs  of 
Mexico.  This  attitude  must  be  carefully  weighed  in  order 
to  determine  how  far,  in  certain  cases,  the  principle  of  the  re- 
sponsibility of  the  Mexican  people  for  damages  growing  out 
of  situations  created  by  one  or  more  of  these  governments  can 
be  accepted  as  the  standard.  Lastly,  it  cannot  be  denied  that 
Mexico  has  the  right,  in  turn,  under  well  recognized  principles 
of  international  law,  to  formulate  claims  against  foreign  govern- 
ments, either  directly  or  on  behalf  of  its  nationals,  or  to  request 
certain  foreign  governments  to  become  parties  to  certain  claims 
against  Mexico,  so  that  they  may  be  heard  in  the  controversy 
and  abide  by  its  results.  These  complications  arising  out  of 
extraordinary  circumstances,  well  known  to  all,  will  make  the 


—  63  — 

international  conventions  setting  up  the  mixed  commissions  and 
their  rules  of  procedure  particularly  laborious.  However  com- 
plicated these  conventions  may  be,  reliance  must  be  placed  on 
the  spirit  of  justice  of  the  interested  governments  and  on  the 
efficiency  of  our  Department  of  Foreign  Affairs,  so  that  a  formula 
may  be  found  at  one  and  the  same  time  safeguarding  the  dignity 
of  Mexico  and  protecting  the  legitimate  interests  of  other  nations 
and  of  their  citizens. 

We  do  not  deem  it  desirable  to  enter  into  further  details 
on  this  matter,  in  view  of  the  international  aspect  involved,  af- 
fecting as  it  does  not  only  pecuniary  interests,  but  the  sensi- 
bilities and  susceptibilities  of  various  governments,  including 
our  own.  We  confine  ourselves,  therefore,  to  the  formulation 
of  the  general  principles  which  must  govern  the  disposition  of 
this  subject. 

We  recognize  that,  as  the  result  of  the  disorder  in  our  country 
during  the  last  ten  years,  the  Mexican  people  have  incurred  certain 
pecuniary  responsibilities.  We  must  not  evade  the  payment  of  these 
responsibilities,  provided  they  conform  to  the  principles  of  inter- 
national law  and  to  our  own  internal  legislation. 

The  Federal  Congress  should  enact  a  law  setting  forth  the 
conditions  under  which  claims  of  nationals  are  to  be  examined  and 
liquidated.  To  this  end,  we  recommend  the  creating  of  a  Liquidation 
Commission,  to  which  it  will  be  compulsory  to  present  all  claims 
for  damages,  it  being  understood,  however,  that  the  decisions  of 
the  commission  may  be  taken  to  the  federal  courts,  in  accordance 
with  procedure  prescribed  by  law. 

If  foreign  claimants  voluntarily  submit  to  the  procedure  out- 
lined above,  it  will  be  understood  that  they  thereby  waive  all  right 
to  file  their  claims  before  the  mixed  commissions  to  which  reference 
will  be  made  hereafter. 

Our  Department  of  Foreign  Affairs  should  open  negotiations 
with  foreign  governments  whose  citizens  hold  claims  against  the 
Mexican  Government,  according  to  the  information  now  in  the  pos- 
session of  the  department.  The  main  purpose  of  these  negotiations 
ought  to  be  to  establish  international  tribunals  or  mixed  commissions, 
—  formed  by  representatives  of  the  Mexican  Government  and  of 
the  interested  foreign  governments,  —  to  determine  by  judicial  pro- 
cedure the  validity  and  amount  of  each  claim. 

An  effort  is  to  be  made  to  extend  the  jurisdiction  of  these 
commissions  to  the  claims  formulated  by  Mexican  citizens  or  the 
Mexican  Government,  arising  out  of  acts  of  foreign  governments  or 
authorities  relating  to  the  political  situation  of  Mexico  in  the  last 
ten  years. 

In  determining  the  validity  of  these  claims,  the  mixed  commis- 
sions  must   take  into   account   not   only   the   general   principles   and 
precedents    of    international    law,    but    the    special    principles    and 


—  64  — 

precedents  of  each  of  the  claimant  countries,  whenever  it  shall  have 
invoked  them  in  analogous  cases  by  way  of  defense. 

Payment  of  claims  against  Mexico  is  to  be  satisfied  by  the  type 
of  security  and  under  the  conditions  to  which  the  claimant  govern- 
ment shall  have  previously  given  its  assent.  The  claims  of  Mexican 
citizens  might  well  be  paid  in  bonds  of  a  special  issue. 

The  Government  may  enter  into  private  arrangements  with  public 
utility  corporations  in  connection  with  the  payment  of  damages  for 
the  seizure  of  their  properties  or  for  injuries  caused  thereto.  It  ought 
likewise  to  enter  into  agreement  with  the  former  banks  of  issue,  as 
suggested  in  another  chapter. 


XII 

PUBLIC    HEALTH 

"\T0  PROGRAM  for  the  rehabilitation  of  Mexico  would  be  com- 
-*-^  plete  without  reference  to  the  problem  of  public  health.  In 
order  to  visualize  its  magnitude  it  will  be  enough  to  say  that  the 
mortality  of  children  under  one  year  of  age  exceeds  forty  per 
cent,  and  that  in  the  very  capital  of  the  Republic,  its  great  centre 
of  wealth  and  culture,  the  mortality  rate  reaches  forty-two  per 
thousand,  a  figure  not  equalled  by  the  most  unhealthy  cities  in 
the  world. 

It  would  be  a  vain  delusion  to  imagine  that  these  conditions 
can  be  radically  modified  through  governmental  action  exclu- 
sively. The  first  reason  for  our  high  mortality  lies  in  the  squalor 
in  which  the  great  mass  of  our  people  live.  So  long,  then,  as 
the  economic  situation  of  this  majority  is  not  materially  changed, 
little  can  be  done  to  diminish  the  high  mortality  rate.  And  yet, 
however  small  the  effectiveness  of  official  action,  it  must  not  be 
withheld  nor  fail  to  be  exerted  to  the  fullest  extent,  if  we  are 
to  save  the  lives  of  so  many  human  beings  who  under  other  con- 
ditions might  live  in  normal  comfort. 

In  addition  to  the  fact  of  its  sparse  population,  Mexico  re- 
ceives no  considerable  influx  of  immigrants,  who  have  contributed 
toward  the  greatness  of  other  nations  of  the  American  continent. 
For  this  reason,  our  country  to  an  even  greater  degree  than 
other  nations,  has  to  conserve  its  human  energies.  Therefore, 
we  see  the  importance  of  social  action  in  the  most  active  form 
possible  in  the  field  of  public  and  private  hygiene. 

Mexico  has  sound  laws  on  this  subject.  The  Sanitary  Code 
of  the  Federal  District  and  Territories  is  in  large  part  an  excellent 
codification  fully  in  keeping  with  modern  thought.  The  difficulty 
lies  in  its  proper  enforcement,  because  of  the  lack  of  pecuniary 
resources, —  which  are  always  niggardly  appropriated  for  such 
services,  —  and  because,  moreover,  the  great  mass  of  the  people 
are  wholly  ignorant  of  the  most  elementary  rules  of  hygiene,  and 
resist  their  enforcement  in  every  way. 

One  of  the  chief  causes  of  our  appalling  mortality  —  which 
has  been  termed  by  an  eminent  Mexican  hygienist  a  shame  and 


—  66  — 

a  blot  on  our  civilization, —  is  the  enormous  frequency  of  gastro- 
intestinal diseases,  due  mainly  to  the  poor  quality  and  even 
inferior  preparation  of  foods.  The  government  can  contribute 
to  reduce  this  cause  of  mortality,  through  the  inspection  of  sup- 
plies, the  supervision  of  markets,  and  the  teaching  of  hygiene  in 
and  outside  the  schools. 

The  condition  of  the  dwellings  in  which  a  majority  of  the 
Mexican  people  live  contributes  to  the  high  mortality  rate.  We 
appreciate  the  practical  difficulties  of  enforcing  the  laws  already 
on  the  statute  books  in  this  respect;  but  the  matter  is  of  such 
importance  that  we  cannot  fail  to  refer  to  it. 

It  should  be  observed,  furthermore,  that  few  of  our  cities 
are  equipped  with  water  reservoirs,  and  with  city  and  house 
drainage,  such  as  is  required  by  the  principles  of  modern  science. 
There  is  probably  not  a  single  pavement  in  the  republic  which 
does  not  show  defects  prejudicial  to  health. 

The  public  hospital  service  cannot  be  in  a  more  deplorable 
state.  These  and  other  deficiencies  have  been  increased  as 
the  natural  result  of  our  domestic  disorders  and  particularly 
because  the  Carranza  administration  disorganized  and  corrupted 
existing  branches  of  the  service. 

Lastly  alcoholism,  and  especially  the  harmful  character  of 
some  of  the  intoxicating  beverages  so  freely  used  by  our  masses, 
comprise  another  important  factor  in  the  high  mortality  rate  and 
in  the  degeneration  of  the  race. 

Even  had  we  the  necessary  technical  knowledge  to  formulate 
specific  recommendations  on  this  topic,  we  should  not  attempt 
their  discussion.  Questions  of  hygiene  and  public  health  are  to 
be  settled  according  to  scientific  principles  and  not  with  reference 
to  the  exigencies  of  political  expediency.  If  we  have  alluded  to 
these  matters,  it  has  been  only  to  call  attention  to  the  impera- 
tive requirement  that  the  State  deal  with  this  national  problem, 
displaying  greater  intelligence  and  vigor  than  heretofore. 

The  problem  of  public  health  offers  another  aspect  which 
cannot  be  overlooked,  since  the  main  and  dominant  aim  of  any 
constructive  program  must  rest,  as  we  said  in  our  preamble,  on 
assuring  to  the  people  adequate  nourishment.  In  considering 
the  agricultural  problem  of  Mexico,  we  refer  to  extensive  tracts 
which  because  of  their  great  fertility  ought  to  draw  a  large  num- 
ber of  farmers.  We  also  dwell  upon  their  contribution  in  an  im- 
portant extent  toward  the  production  of  the  staple  foods  necessary 
for  domestic  consumption.     In  this  statement  we  allude  to  the 


—  67  — 

regions  of  our  torrid  zone,  which  are  so  unhealthy  that  not  even 
the  natives  escape  the  scourge  of  endemic  diseases.  It  is  not 
to  be  wondered  at,  therefore,  that  the  density  of  population  in 
these  zones  should  be  so  small  and  that  their  yield  of  crops  is 
in  no  way  proportionate  to  their  fertility,  or  much  less,  to  the 
extent  of  arable  land. 

Improved  sanitary  conditions  in  these  important  portions 
of  Mexican  territory,  the  fight  against  insects  that  transmit  deadly 
germs,  the  construction  of  drainage  works,  and  instruction 
of  the  inhabitants  of  those  sections  as  to  the  advantage  of 
complying  with  certain  well-tried  rules  of  hygiene,  —  these 
policies  would  tend  to  transform  the  regions  in  question,  and, 
in  large  measure,  solve  the  problem  of  an  adequate  food  supply. 

As  a  mere  first  step  in  this  direction  and  for  the  other  pur- 
poses which  in  this  regard  pertain  to  the  State  in  a  program  of 
social  action,  we  submit  the  following  conclusion: 

An  executive  department  should  be  created  to  be  known  as  the 
Department  of  Public  Health  and  Charities,  which  shall  be  the  agent 
of  the  federal  government  in  carrying  out  an  energetic  and  active 
campaign  on  behalf  of  public  sanitation. 


XIII 
DEVELOPMENT    OF    OUR    NATURAL    RESOURCES 

THE  NATURAL  resources  of  Mexico,  which  have  earned  for 
us  the  reputation  of  being  one  of  the  richest  countries  in 
the  world,  do  not  amount  to  more  than  potential  wealth  which 
we  Mexicans  cannot  develop  to  any  appreciable  extent,  if  we 
rely  solely  on  our  own  efforts.  In  order  that  these  resources 
may  be  so  utilized  as  to  become  a  factor  in  the  economic  world 
situation,  we  need  extensive  amounts  of  capital  which  Mexico 
lacks,  as  well  as  technically  trained  men  whom  we  are  only 
now  beginning  to  form.  We  must  recognize,  in  view  of  the  un- 
broken experience  of  the  last  forty  years,  that  it  is  to  foreign 
cooperation  that  we  owe  these  two  indispensable  factors.  We 
shall  continue  to  need  this  cooperation  for  many  years  to  come, 
if  we  are  not  to  lag  behind  other  nations  of  the  American  con- 
tinent with  natural  wealth  comparable  to  ours. 

Furthermore,  we  can  neither  shun  certain  duties  of  human 
solidarity  imposed  upon  us  by  our  world  position,  nor  seek  to 
evade  the  action  of  certain  economic  laws,  as  inexorable  in  their 
effects  as  are  the  laws  of  nature.  Were  it  nothing  more  than 
to  serve  our  selfish  advantage,  we  ought  to  satisfy  the  require- 
ments of  other  nations,  so  far  as  our  resources  will  allow  and 
the  demands  of  world  industry  and  trade  require. 

Mexico  has  already  begun  to  play  a  role  of  primary  im- 
portance in  this  regard.  The  fibre  known  as  sisal  (henequen) 
used  in  agriculture,  is  almost  indispensable  in  world  wheat 
production.  Our  mines  of  silver,  gold,  copper,  lead,  zinc  and  those 
of  the  other  industrial  metals,  give  Mexico  an  important  place 
among  mining  countries,  and  probably  the  primacy  so  far  as 
silver  is  concerned.  Lastly,  the  wealth  of  our  recently  discovered 
oil  lands  has  been  a  factor  in  bringing  about  an  evolution,  almost 
an  industrial  revolution,  because  of  the  new  applications  of 
petroleum  and  its  derivatives. 

What  part  is  the  State  called  upon  to  play  in  the  face  of  these 
phenomena?  It  is  our  conviction  that  the  first  premise  of  a 
sound  policy  in  the  matter  of  our  mineral  production  is  that  of 
placing  no  obstacles  in  the  way  of  free  action  on  the  part  of 


—  70  — 

private  initiative  in  the  development  of  these  sources  of  wealth. 
Indeed,  the  great  progress  achieved  by  Mexico  in  this  field  dur- 
ing the  last  generation  was  due  to  private  initiative,  which  did 
not  encounter  any  obstacle  created  by  public  authority.  Con- 
trary to  the  statements  made  by  persons  ill-informed,  the  admi- 
nistration of  General  Diaz  merely  afforded  the  mining,  smelter 
and  oil  industries  strong  moral  support,  in  reality  less  than  that 
given  to  other  industries,  such  as  the  textile  industry,  which 
flourished  by  tariff  protection.  The  exemptions  from  future  or 
contingent  taxation  and  from  import  duties  on  machinery  and 
equipment  designed  for  development  work,  such  as  were  com- 
monly granted  to  smelters  and  companies  engaged  in  the  oil 
industry,  constituted  an  insignificant  manifestation  of  liberality 
when  compared  with  the  benefits  that  these  companies  confer- 
red upon  the  country  and  the  public  treasury.  The  chief  com- 
panies to  whose  efforts  our  great  production  of  oil  is  due  operate 
lands  which  have  not  been  the  object  of  any  concession  from 
the  State. 

Nevertheless,  it  is  our  judgment  that  not  even  the  above 
form  of  official  protection  should  in  the  future  be  given  to  these 
industries,  which  are  now  firmly  rooted  in  Mexico.  This  protec- 
tion, more  than  an  aid,  was  a  kind  of  stimulation  that  is  now 
wholly  unnecessary.  This  is  confirmed  by  the  manifest  fact 
that  these  industries  have  prospered  through  the  natural  action 
of  economic  forces,  despite  the  fact  that  the  Carranza  adminis- 
tration substitued  the  policy  of  extortion  for  that  of  encourage- 
ment. We  are  naturally  far  from  recommending  the  former 
policy;  but  it  has  at  least  served  to  demonstrate  that  when  a 
field  of  productive  activity  is  once  incorporated  into  the  com- 
plicated economic  structure  of  the  world,  it  grows  and  prospers, 
even  in  the  face  of  artificial  obstacles  of  a  policy  unfriendly  to 
the  free  display  of  private  initiative. 

The  first  condition,  then,  which  the  policy  of  the  govern- 
ment should  satisfy  in  this  regard  is  that  of  affording  full 
guarantees  to  private  initiative,  free  from  special  protection  or 
favoritism.  Again,  it  is  our  conviction  that  as  to  those  resources 
which  are  the  natural  product  of  the  Mexican  territory  and 
which,  when  once  extracted,  can  not  again  yield  their  product, 
the  government,  for  the  good  of  the  nation,  ought  to  participate 
directly  in  the  profits  derived  from  their  extraction.  It  is  our 
judgment  that  the  fairest  method  of  assuring  this  participation 
is  to  levy  special  taxes,  proportional  and  equitable,  to  use  the 


—  71  — 

language  of  the  constitution,  computed  on  the  prices  prevailing 
either  at  the  place  where  the  products  are  obtained  or  at  the 
port  of  shipment. 

While  condemning  the  principle  of  intrusion  established 
by  the  Carranza  administration  under  Article  27  of  the  con- 
stitution of  Queretaro,  we  recognize  as  inherent  in  the  State 
the  power  and  duty  of  seeing  that  our  natural  resources  are 
not  wasted  and  that  they  are  applied  as  far  as  possible  to 
promote  our  domestic  economic  development. 

Intervention  by  the  State  is  indispensable  in  certain  lines, 
in  order  to  prevent  unnecessary  waste,  which  is  criminal  if  the 
needs  of  future  generations  and  the  economic  and  political  ad- 
vancement of  Mexico  are  to  be  taken  into  account. 

No  one  may  properly  deny  that  rights  acquired  under  pre- 
existing laws  should  be  recognized  by  the  State  no  less  than  by 
the  individual;  but  this  principle  must  be  made  to  accord  with 
that  of  the  exercise  of  the  police  power  of  the  State,  which 
increases  in  scope  as  the  phenomena  of  life  become  more  and 
more  complicated.  The  constitution  of  Queretaro,  distorting  this 
principle,  violates  private  rights  and  establishes  the  absolute 
predominance  of  the  State  at  their  expense.  Confining  our  views 
solely  to  the  question  of  petroleum,  which  has  given  rise  to  a 
complex  problem,  domestic  and  international  in  character,  we 
affirm  that  the  nationalization  of  this  source  of  wealth,  to  the 
disregard  of  rights  defined  by  laws  of  unquestionable  validity, 
is  a  measure  which  not  only  violates  the  rights  of  the  individual, 
but  also  is  of  no  benefit  to  the  community,  as  we  shall  fully 
demonstrate. 

The  only  reason  that  might  possibly  be  invoked  to  justify 
the  nationalization  of  petrnjpnm  Hppngif^  is  the  necessity  of 
preventing  their  early  exhaustion;  and  indeed  Article  27  of  the 
Queretaro  constitution  implies  the  action  of  the  State  as  the 
means  ofGg£s^rvjng_ihis  nationaLwealth.  This  is  the  true  na- 
tional interest.  Nevertheless,  the  administrations  that  have 
exercised  power  in  Mexico  under  the  last-mentioned  constitution 
have  not  hesitated  to  place  oil  deposits  on  the  same  plane  as 
metaliferous  bodies,  whose  legal  status  has  been  defined  by 
century-old  laws.  However,  inasmuch  as  these  laws  were  not 
inspired  by  the  motive  of  conserving  the  mineral  deposits,  but 
rather  permit  their  development  without  let  or  hindrance,  the 
conclusion  is  forced  upon  us  that  the  enactments  now  in  force 
in  Mexico  concerning  the  development  of  petroleum  are  devoid 


—  72  — 

of  serious  economic  purpose,  and  have  no  practical  value  from 
the  point  of  view  of  national  interest. 

Much  has  been  made  of  the  argument  that  the  oil  develop- 
ment benefits  only  the  foreigner;  and  a  new  motive  is  afforded 
for  the  scheme  of  nationalization  on  the  assumption  that  it 
will  serve  to  prevent  this  result.  We  do  not  HpIjpvp  th^t  the 
theory  that  the  development  of  petroleum  benefits  only  the 
foreigner  can  be  honestly  sustained*  The  country  also  obtains 
certain — advantages,  either  indirectly  through  the  payment  of 
wages,  the  technical  training  of  our  workmen,  the  erection  of 
permanent  improvements,  and  the  increase  in  the  general  volume 
of  trade,  or  directly  through  the  payment  of  substantial  taxes 
into  the  treasury,  and  of  large  rentals  and  royalties  to  Mexican 
landowners.  Be  this  as  it  may;  we  must  recognize  that  this 
wealth  lay  for  years  and  centuries  at  the  exclusive  disposi- 
tion of  the  inhabitants  of  Mexico  and  that  they  did  not  turn  it 
to  account,  in  fact  did  not  even  discover  it.  It  is  small  wonder, 
then,  that  the  discoverers,  those  who  with  their  capital  and 
their  energy  brought  about  its  development,  should  demand  the 
chief  share  of  the  profits  of  what  we  failed  to  make  any  use 
by  our  own  efforts. 

In  Mexico,  mining,  to  the  legal  status  of  which  it  is  sought 
to  bring  petroleum,  is  almost  exclusively  in  the  hands  of  for- 
eigners. This  should  have  convinced  the  Carranza  administra- 
tion of  the  impossibility  of  conserving  the  oil  fields  in  the  hands 
of  Mexicans  and  for  the  chief  benefit  of  the  Mexican  people  by 
merely  making  them  subject  to  the  provisions  of  the  mining  law. 
Furthermore,  it  is  public  and  notorious  that  the  concessions  for 
the  development  of  petroleum  granted  by  the  last  two  govern- 
ments to  Mexican  citizens,  —  some  of  them  persons  high  in  ad- 
ministration circles,  —  have  merely  been  peddled  by  the  conces- 
sionaires among  foreign  companies,  thereby  discrediting  the 
"nationalist"  theory  invoked  as  a  justification  for  the  policy 
adopted. 

It  isjiistressing  to  be  forced  to  admit  that  if  the  production 
of  petroleum  has  not  had  its  full  utilization  in  Mexico,  it  is 
because  of  the  state  of  revolt  and  attendant  insecurity  that  has 
prevailed  for  the  last  ten  years.  Under  these  conditions,  pipelines 
to  carry  the  oil  to  our  large  industrial  centres  and  cities  have 
not  been  laid;  for  the  same  reason,  but  few  of  our  towns  have 
asphalt  pavements,  while  highways  are  to  a  large  extent  impas- 
sible.  To  the  same  cause,  too,  may  be  ascribed  the  lack  in  our 


—  73  — 

towns  of  gas  works  which  constitute  an  elementary  and  in- 
dispensable service  in  cities  elsewhere,  either  by  the  use  of 
natural  gas  from  oil  wells,  —  now  going  to  waste  in  a  shame- 
ful manner  in  Mexico,  —  or  of  manufactured  gas.  Our  now 
almost  depleted  woods  are  being  wasted,  with  the  conse- 
quent ruin  of  our  arable  lands,  in  order  to  supply  charcoal 
for  domestic  fuel,  when  every  town  of  importance  in  Mexico 
ought  to  have  gas  service  cheaper,  better  and  more  hygienic 
than  our  primitive  and  traditional  charcoal  fuel.  Not  even 
Tampico,  the  heart  of  the  oil  industry,  makes  use  of  this 
fuel  gas,  for  in  that  city,  —  paradoxical  as  it  may  seem,  —  fuel 
for  domestic  purposes  costs  more  than  in  almost  any  other  town 
in  the  Republic.  Lastly,  in  order  not  to  make  this  enumeration 
interminable,  our  agricultural  system  might  have  been  trans- 
formed by  the  use  of  certain  petroleum  derivatives  in  the  opera- 
tion of  pumps,  —  which  by  thousands  might  be  irrigating  lands 
that  now  lie  fallow,  —  had  not  revolutionists  and  bandits  become 
the  daily  scourge  of  all  persons  living  outside  of  towns. 

Under  the  conditions  here  described  Mexican  petroleum  will 
increase  steadily  in  production  and  will  seek  foreign  markets. 
This  result  will  be  due  in  no  small  measure  to  the  methods 
devised  by  the  Carranza  administration,  which  the  present 
Government  continues  to  apply  with  as  much  fervor  as  candor. 

A  sound  petroleum  policy  should,  in  our  judgment,  satisfy 
these  conditions:  respect,  in  the  first  place,  for  rights  legally 
acquired  and  interests  legitimately  created,  thus  vindicating  the 
fair  name  of  Mexico,  which  after  recognizing  in  its  statutes  that 
petroleum  belongs  to  the  owner  of  the  soil  cannot  overturn  this 
principle  without  sacrificing  its  honor  and  exposing  itself  to 
international  conflicts;  attention  to  our  domestic  needs,  while 
not  disregarding  the  demands  of  world  trade;  and  consideration 
and  provision,  as  far  as  possible,  for  the  future  economic  and 
political  requirements  of  Mexico. 

We  are  bound  to  say  at  this  point,  not  by  way  of  censure 
but  merely  in  order  to  record  the  fact,  that  neither  the  Carranza 
administration  nor  its  successor  has  been  able  to  give  evidence 
of  comprehending  any  of  these  indispensable  requirements.  They 
have  violated  the  private  rights  of  the  owner  of  the  land;  they 
have  taken  no  pains  to  see  that  petroleum  wealth  be  used  in 
Mexico  in  its  varied  manifestations  and  thus  become  a  direct 
and  active  factor  in  its  progress;  still  less  have  they  borne  in 


—  74  — 

mind  that  the  petroleum  will  be  exhausted  in  proportion  as  its 
extraction  is  intensified. 

It  is  this  latter  aspect  of  the  problem  which  directly  de- 
mands governmental  action.  As  to  the  other  aspects,  the  first 
merely  calls  for  a  negative  attitude,  —  a  respect  for  private 
rights,  —  while  the  second  makes  necessary  a  government  which 
will  maintain  order,  and  observe  an  administrative  policy  of 
strict  integrity,  thus  stimulating  the  spirit  of  enterprise  among 
the  inhabitants  of  the  country. 

Free  from  hostility  toward  the  large  industrial  and  com- 
mercial nations  that  are  using  Mexican  petroleum  in  ever-in- 
creasing quantities  in  their  factories  and  vessels,  our  government 
should  open  its  eyes  to  the  significant  fact  that  Mexico  is  today 
a  field  of  development  which  is  being  preferred  over  other 
countries  classified  as  reserve  lands  for  the  future.  This  devel- 
opment has  increased  at  a  tremendous  rate.  The  discovery  of 
Mexican  petroleum  in  commercial  quantities  dates  back  barely 
fifteen  years;  today  Mexico  is  the  second  largest  producer 
of  petroleum  in  the  world.  However  much  it  may  be  argued 
that  our  oil  resources  are  barely  scratched,  it  is  the  part  of 
wisdom  to  provide  for  the  day  when  this  wealth  may  be 
exhausted. 

It  would  seem,  then,  as  if  the  Government  should  be  con- 
vinced of  the  urgency  of  controlling  the  extraction  of  our  mineral 
oil  by  wise  regulation.  But  the  Carranza  government,  and 
even  more  so  the  present  administration,  have  adopted  the  policy 
of  forcing  extraction  to  the  very  limit,  without  any  regard  to  the 
future  needs  of  the  country.  The  petroleum  decrees  and  other 
regulations  now  in  force  do  not  aim  at  regulating  development; 
they  sanction  the  spoliation  of  legitimate  rights  while  inviting 
undue  exploitation  —  a  veritable  waste  of  a  source  of  wealth 
that  can  not  be  replaced.  The  system  of  concessions  and  "de- 
nouncements" is  directed  straight  at  this  result;  and  if  it  has 
not  yet  occurred,  it  is  due  to  causes  foreign  to  the  policy  of  the 
Government,  such  as  the  lack  of  pipelines  to  carry  petroleum 
to  the  ports  and  the  shortage  of  tankers  to  transport  it  abroad. 

Few  practices  of  former  governments  were  so  bitterly  de- 
nounced by  the  Carranza  revolution  as  the  granting  of  conces- 
sions for  the  development  of  the  nation's  resources.  Neverthe- 
less, we  have  already  seen  that  the  governments  emanating 
from  this  revolution  have  granted  countless  concessions  for  the 
development  of  petroleum,  and  have  even  created  what  might  be 


—  75  — 

called  "huge  oil  land  holdings",  more  open  to  criticism  from  the 
economic  point  of  view  and  more  pregnant  with  future  grave 
dangers  than  the  agricultural  land  holdings  so  harshly  stigma- 
tized in  the  revolutionary  literature  and  legislation. 

The  most  striking  thing  in  this  connection  is  that  this  pro- 
cedure has  been  established  without  any  law  to  sanction  it.  The 
Executive  branch  has  arrogated  to  itself  the  right  to  substitute 
the  will  of  the  legislator.  By  mere  administrative  rulings  the 
Executive  has,  in  fact,  interpreted  an  entire  principle  of  the  con- 
stitution—  Article  27  —  while  secretaries  of  department  dispose 
of  the  resources  of  the  nation  with  more  recklessness  than  if  it 
were  their  own  patrimony. 

It  is  natural,  an  even  legitimate,  that  individuals  and  oil 
companies  should  develop  petroleum  deposits  on  as  large  a  scale 
as  possible;  but  what  is  permissible  in  the  case  of  an  individual 
or  of  a  company  organized  for  purposes  of  commercial'  gain 
may  not  be  permissible  to  a  government  charged  with  safe- 
guarding the  nation's  interests,  and  of  which  it  is  the  duty  to 
look  beyond  the  life  of  the  generation  to  which  the  men  in  power 
at  any  given  moment  belong.  True  it  is  that  we  do  not  know 
what  the  future  holds  in  store  for  us  in  the  matter  of  fuel,  nor 
whether  future  discoveries  will  thrust  petroleum  for  the  pre- 
eminent position  it  now  occupies.  Until  such  events  occur,  how- 
ever, it  is  the  primary  duty  of  the  government  to  guarantee  the 
conservation  of  this  source  of  wealth.  Merely  to  provide  for 
temporary  enrichment,  at  the  risk  of  the  welfare  of  future  genera- 
tions, is  not  the  work  of  statesmen  nor  of  patriots. 

How,  then,  can  the  public  interest,  the  national  interest, 
be  brought  into  accord  with  that  of  the  individual?  What  formula 
can  be  devised  to  harmonize  a  sound  policy,  such  as  we  conceive 
it,  with  the  proprietary  rights  of  the  owner  of  the  soil  defined 
by  our  civil  laws?  We  are  not  so  vain  as  to  believe  that  we  have 
discovered  this  formula.  But  true  to  our  purpose  of  honestly 
expressing  our  views  on  the  national  problems,  we  must  submit 
the  method  which,  in  our  humble  opinion,  can  bring  into  harmony 
positions  apparently  irreconcilable. 

The  so-called  policy  of  nationalization  is,  we  have  already 
said,  the  deliberate  endorsement  of  spoliation.  To  despoil  is  an 
illicit  act.  It  is  not  illicit  to  limit  the  exercise  of  the  right  of 
property  when,  interpreted  in  the  light  of  the  vast  scope  given 
to  it  by  civil  laws,  such  property  right  is  incompatible  with  the 
rights  of  the   community.    Theodore  Roosevelt  embodied   this 


—  76  — 

principle  in  the  following  vigorous  formula:  "When  property 
rights  conflict  with  human  rights,  property  rights  must  give  way." 

It  would  be-  repugnant  to  the  modern  concept  of  social 
justice  for  the  owner  of  a  forest  or  of  an  oil  well,  in  the  exercise 
of  the  absolute  ownership  guaranteed  to  him  by  civil  law,  to 
believe  himself  authorized  to  set  fire  to  this  forest  or  this  oil 
well,  merely  so  that  he  might  gratify  himself  at  the  sight  of 
an  imposing  spectacle.  Such  an  act  would  be  regarded  as  a 
violation  of  the  rights  and  interests  of  society,  and  no  law  which 
forbade  and  punished  it  could  be  held  as  unjust.  Mexico,  to- 
gether with  all  civilized  countries,  has  on  its  statute  books 
laws  and  administrative  regulations  forbidding  the  destruction 
or  wanton  deforestation  of  privately-owned  forests,  and  no  one 
questions  the  legitimacy  of  these  provisions,  even  though  they 
abridge  the  control  of  owners.  All  the  more,  then,  may  the 
State  enact  laws  restricting  the  exploitation  of  those  sources  of 
natural  wealth  which  are  not  replaceable,  such  as  petroleum. 

All  these  laws  have  as  their  basis  the  harmonization  of  the 
rights  of  the  individual  with  those  of  the  community,  and  are 
a  manifestation  of  the  police  power  which  pertains  to  the  State. 
In  the  exercise  of  this  function  the  legislator  may,  and  in  our 
opinion  should,  hold  in  reserve  those  oil-bearing  districts  that 
have  not  yet  been  discovered  through  private  initiative,  and  refuse 
to  open  them  to  active  operation.  The  already  known  oil  districts, 
whether  developed  or  not,  should  be  respected,  so  as  not  to 
violate  a  present  right,  not  merely  a  contingent  right,  such  as  that 
of  the  proprietor  who  as  yet  does  not  know  of  the  existence  of 
petroleum  on  his  lands,  and  has  not  performed  an  act  indicating 
an  intention  of  making  use  of  such  petroleum.  There  is  an  un- 
questionable difference  between  the  one  situation  and  the  other. 
Accordingly,  a  limitation  established  by  law  in  the  latter  case 
would  not  injure  vested  rights.  Let  it  be  noted  that  we  speak 
of  limitation  not  of  spoliation,  and  of  the  limitation  of  a  right 
that  is  merely,  after  all,  an  expectancy. 

If  in  the  exercise  of  its  police  functions  the  State  may,  on 
conditions  prescribed  by  law,  limit  the  enjoyment  of  private 
ownership,  it  may,  likewise,  in  satisfying  the  public  interest,  set 
the  time  when  a  particular  source  of  wealth, —  the  immediate 
enjoyment  of  which  the  civil  law  leaves  to  the  individual, —  may 
be  opened  to  exploitation.  Accordingly,  the  reserve  lands  should 
be  opened  to  development  when  the  law  provides,  the  respective 


—  77  — 

owners  always  enjoying  the  preferential  right  to  engage  in  this 
development. 

The  policy  we  have  outlined  conforms  wholly  with  the 
principle  of  Article  27  of  the  constitution  of  1857  which  clas- 
sifies respect  for  private  property  as  one  of  the  inherent  rights 
of  man;  for  no  sound  doctrine  of  constitutional  law  denies  to 
the  legislator  the  power  to  limit  and  regulate  the  enjoyment  of 
such  property,  as  required  by  public  interest.  If  the  public 
interest  demands,  as  is  unquestionably  the  case  in  the  situation 
under  consideration,  that  petroleum  resources  be  developed 
without  waste  and  be  conserved  for  the  greatest  period,  the 
State  may  regulate  the  development  of  this  source  of  wealth. 
The  constitution  of  1917  and  the  governments  existing  there- 
under have  substituted  for  the  power  of  regulating  the  enjoy- 
ment of  private  property  that  of  depriving  the  legitimate  owner 
of  such  property,  while  believing  that  it  is  in  the  public  interest 
to  force  oil  extraction  as  much  as  possible.  It  will  be  seen,  then, 
that  the  policy  we  recommend  is  diametrically  opposite  to  that 
of  the  present  Mexican  Government.  Our  policy  is  constructive; 
that  of  the  Mexican  Government  destructive. 

We  have  considered  this  matter  at  some  length  not  only 
because  it  is  the  subject  of  constant  and  bitter  discussions,  but 
also  because  of  its  intrinsic  importance.  We  shall  now  formulate 
the  conclusions,  which,  in  our  judgment,  should  form  part  of  a 
program  of  governmental  action  in  the  problem  of  the  develop- 
ment of  the  natural  resources  of  Mexico. 

We  believe  that  in  the  matter  of  the  development  of  our  natural 
resources  the  legislator  should  be  guided  by  the  purpose  of  harmoniz- 
ing the  rights  and  interests  of  the  individual,  as  denned  by  civil  law, 
with  the  rights  and  interests  of  the  Mexican  people. 

We  do  not  believe  that  the  strictly  mining  legislation,  as  it 
existed  under  the  1857  constitution,  requires,  at  present,  any  sub- 
stantial modification;  but  we  denounce,  as  a  violation  of  private 
rights  and  as  contrary  to  national  interests,  the  application  of  this 
system  of  legislation  to  oil  bodies  or  deposits. 

The  exploitation  of  petroleum  measures  should  not  be  left  ab- 
solutely to  the  will  of  the  landowners  and  of  lessees  thereunder  for 
the  following  reasons.  In  the  first  place,  petroleum  is  a  natural 
product  of  the  soil,  not  capable  of  reproduction;  secondly,  it  is  a 
substance  of  primary  importance  in  the  economic  development  of 
Mexico;  and,  lastly,  it  is  being  exported  in  ever  increasing  amounts 
to  meet  the  constantly  growing  demands  of  world  trade  and  industry. 
It  is  the  paramount  duty  of  the  State,  in  view  of  these  phenomena, 
to  intervene  in  the  exploitation  of  petroleum.  This  intervention 
should  have  a  two-fold  aim:    (1)    Enactment  of  regulations  of  de- 


—  78  — 

velopment  which  shall  prevent  the  waste  of  the  products  extracted; 
(2)  Provision  for  the  future  needs  of  the  Mexican  people  through 
the  creation  of  oil  reserves  which  shall  secure  for  periods  of  suc- 
cessive years,  and  for  as  long  a  time  as  possible,  the  enjoyment  of 
this  source  of  wealth. 

In  order  to  carry  out  this  latter  purpose,  we  recommend  that 
the  National  Geological  Institute  undertake  to  locate  the  greatest 
number  possible  of  oil-bearing  districts,  which  have  not  yet  been 
opened  up  to  prospecting  or  exploitation  by  private  individuals  or 
companies.  The  districts  thus  designated  should  be  closed  to  im- 
mediate exploitation,  and  should  only  be  operated  successively  and 
as  determined  by  law. 

So  soon  as  a  district  is  reserved,  the  government  should  seek  to 
reach  an  agreement  with  the  owners  of  the  land  within  such  district, 
with  a  view  to  acquiring  for  the  Nation  the  right  to  develop  petroleum 
within  the  circumscribed  areas.  Owners  failing  to  reach  an  agreement 
with  the  government  may,  however,  operate  on  their  own  account 
or  contract  for  the  development  with  others,  so  soon  as  the  district  has 
been  opened  to  exploitation.  Should  they  fail  to  exercise  this  right 
within  the  period  set  by  law,  the  government  may  order  that  the 
area  in  question  be  opened  to  active  operation,  on  the  ground  of 
public  welfare  (utilidad  publico,),  and  the  right  of  development  granted 
under  terms  prescribed  by  law.  In  such  event,  and  in  the  absence  of 
an  agreement  between  the  operator  and  the  owner  as  to  the  com- 
pensation to  be  enjoyed  by  the  latter,  the  former  shall  pay  him 
an  amount  equal  to  the  value  of  10  per  cent  of  the  output. 

We  regard  the  system  of  "denouncements"  and  concessions  to 
develop  oil  deposits  as  contrary  to  the  national  interests,  and  often 
in  violation  of  property  rights.  Inasmuch  as  Congress  has  not  enacted 
the  law  to  carry  into  effect  Article  27  of  the  constitution  of  Que- 
r6taro,  the  "denouncements"  and  concessions  have  no  legal  basis, 
even  when  measured  by  the  standard  of  this  constitution.  They 
afford,  furthermore,  a  pretext  for  immoral  speculation,  and  for 
rewarding  political  services  at  the  expense  of  the  nation's  resources; 
and,  lastly,  they  form  an  incentive  to  waste  a  substance  that  it  is 
imperative  to  conserve  for  the  greatest  period  possible,  for  the  good 
of  the  whole  people. 

The  development  of  which  the  oil  industry  is  susceptible,  the 
preponderant  part  which  foreign  companies  and  even  foreign  govern- 
ments play  in  its  exploitation,  the  technical  character  of  the  ex- 
ploitation, and,  lastly,  the  national  interest  involved,  render  it  ex- 
pedient that  this  whole  matter  be  subject  to  a  uniform  policy 
throughout  the  Republic.  We  therefore  think  it  necessary  that  the 
federal  constitution  should  vest  in  the  federal  authorities  the  ex- 
clusive power  to  intervene  in  this  industry. 

We  favor  the  levying  of  special  taxes  on  the  mining  industry 
and  on  the  production  of  petroleum.  These  taxes  should  be  neither 
oppressive  nor  confiscatory,  but  should  be  established  bearing  in  mind, 
among  other  factors,  the  hazards  and  uncertainties  to  which  capitals 
invested  in  such  enterprises  are  exposed.   We  believe  that  the  fairest 


7Q 


basis  for  the  imposition  of  these  special  taxes  consists  in  assessing  a 
certain  percentage  of  the  value  of  the  products  either  at  the  place 
of  production  or  at  the  port  of  shipment.  The  federal  congress 
should  be  exclusively  charged  with  the  levying  of  such  taxes;  but 
an  equitable  portion  should  be  ceded  to  the  respective  states  and 
municipalities. 

With  regard  to  our  timber  lands,  we  recommend  that  the  federal 
and  state  governments,  within  their  respective  spheres,  enact  and 
make  effective  provisions  forbidding  the  destruction  of  forests  and 
encouraging  the  growing  of  new  woods.  The  federal  and  state 
governments,  and  the  municipalities  should  set  apart  public  lands  in 
sufficient  amount  for  the  growing  of  woods,  and,  in  general,  for  the 
planting  of  trees.  The  federal  government  should  be  authorized 
by  law  to  expropriate,  for  reasons  of  public  welfare  and  with 
compensation,  such  wooded  tracts  as  it  may  be  advisable  to  reserve, 
while  at  the  same  time  so  regulating  their  exploitation  as  to  assure 
their  conservation. 

We  condemn  the  system  of  favoritism  almost  universally  followed 
by  Mexican  governments  in  the  granting  of  concessions  to  develop 
the  public  domain.  The  laws  on  the  exploitation  of  timber  lands, 
resin,  rubber,  and  other  natural  products  on  national  lands,  and  those 
relating  to  hunting,  fishery,  exploitation  of  saltbeds,  and,  in  general, 
to  the  enjoyment  of  natural  resources,  should  be  amended  so  that  the 
granting  or  refusing  of  concessions,  and  the  fixing  of  the  portion  to 
be  paid  to  the  State  for  the  privilege  of  development,  should  not  be 
left  to  the  will  of  the  Executive.  Concessions  should  be  granted  on 
terms  to  be  fixed  by  law,  and  adjudicated  in  public  auction,  taking 
as  a  point  of  departure  for  the  compensation  to  be  paid  by  the 
concessionaire  the  minimum  amounts  established  in  the  respective 
schedules. 


XIV 
ECONOMIC    AND    FINANCIAL    PROBLEMS 

THE  STUDY  of  the  economic  and  financial  problems  of 
Mexico,  constituting  one  of  the  most  important  aspects 
of  the  general  problem  of  reconstruction,  calls  for  accurate  data, 
which,  unfortunately,  no  one  has  in  sufficient  volume.  The 
figures  available  are,  to  a  large  extent,  hypothetical,  for  many 
reasons,  among  which  may  be  cited  the  neglect  of  all  statistical 
compilation  during  the  Carranza  administration. 

The    subject    under    consideration    presents    two    phases: 

(1)  The   liquidation   and   payment   of  the   national   debt;    and 

(2)  the  reorganization  of  domestic  credit  and  the  readjustment 
of  the  factors  of  production. 

The  national  debt  may  be  divided  into  two  parts:  (1)  That 
portion  incurred  before  the  revolution;  (2)  That  portion  growing 
out  of  the  revolution.  The  former  is  susceptible  of  liquidation 
by  simple  arithmetical  operations;  the  liquidation  of  the  latter 
calls  for  the  establishment  of  an  equitable  scheme  which  the 
law  should  precribe. 

As  to  the  former,  if  we  follow  the  classification  generally 
adopted,  we  must  divide  the  obligations  into  internal  debt, 
foreign  debt,  and  debts  guaranteed  by  the  nation.  All  these 
debts  are  increasing  daily  through  the  accumulation  of  interests 
accrued  and  outstanding.  Nevertheless,  it  is  advisable  to  present 
certain  figures  so  as  to  give  an  idea  of  the  burdens,  as  to  which 
there  is  no  question,  which  weigh  on  the  Mexican  people. 

The  newspapers  of  Mexico  City  published  on  July  1st,  1920, 
the  following  statement  from  the  Treasury  Department: 

Internal  Debt 138,795,550.00  pesos 

Foreign  Debt 286,944,251.37      " 

Total _ 425,739,801 .37      " 

or  212,869,900.69  dollars 
Interest  on  both  debts  calculated  to  July 

1  st,  1 920 - - 1 22,509,667.5 1   pesos 

or  61,254,833.76  dollars 


—  82  — 

Accordingly,  Mexico  owed  on  July  1st, 
1920,  merely  for  the  two  items 
above  specified,  according  to  of- 
ficials figures - ._ - ...     548,249,468.88  pesos 

or     274,124,734.44  dollars 

The  preceding  amount  is  deceptive,  since  it  omits  entirely 
the  1913  loan.  Lack  of  information  precludes  our  fixing  the 
exact  amounts  received  on  account  of  this  loan,  the  bonds  of 
which  are  for  the  most  part  held  by  foreigners.  A  fair  estimate, 
however,  of  these  bonds,  including  accrued  interests,  exceeds 
150,000,000  pesos,  or  75,000,000  dollars. 

Furthermore,  there  is  the  debt  growing  out  of  guarantees 
assumed  by  the  Federal  Government  which  must  be  paid.  This 
has  been  computed  by  the  Federal  Treasury  (as  of  April  1st, 
1913),  at  4,072,700  pesos  or  2,036,350  dollars;  but  this  amount 
only  included  obligations  of  the  different  States  guaranteed  by 
the  Federal  Government.  To  this  sum  we  must  add  interest 
charges,  the  amounts  represented  by  the  mortgage  bonds  of  the 
National  Railways  which  the  government  guaranteed,  bonds  of 
the  Vera  Cruz-Isthmus  Railroad,  and  bonds  of  the  Farm  Loan 
Board  (Caja  de  Prestamos  para  Obras  de  Irrigation  y  Fomento  de  la 
Agricultura).  And  to  all  of  the  foregoing  must  be  still  further 
added  what  is  due  on  the  so-called  Pious  Fund  of  California. 

Based  on  the  items  enumerated  in  the  foregoing  paragraph, 
we  calculate  that  the  responsibility  of  the  Mexican  nation  on 
these  lines  amounts  to  approximately  500,000,000  pesos  or 
250,000,000  dollars.  If  we  add  the  aggregate  of  the  so-called 
internal  and  domestic  debts,  it  is  reasonable  to  assume  that  at 
the  time  of  writing  (August,  1920),  the  total  obligations  growing 
out  of  the  items  specified  in  the  preceding  paragraphs  aggregate 
not  less  than  one  billion  two  hundred  million  pescs,  or 
600,000,000  dollars. 

In  addition  to  these  debts,  there  is  that  growing  out  of 
the  responsibilities  caused  by  the  various  revolutionary  move- 
ments since  November,  1910.  The  highest  will  unquestionably 
be  those  occasioned  by  the  seizure  of  funds  of  the  banks  and  total 
ruin  of  their  business;  those  arising  out  of  the  seizure  of  railroad 
lines  and  destruction  of  permanent  property  and  rolling  stock, 
and  lastly,  out  of  the  seizure  of  properties  belonging  to  nationals 
and  foreigners.  It  is  impossible  to  estimate  even  approximately 
the  amount  of  this  obligation.    One  item,  alone,   that  of  cash 


—  83  — 

taken  manu  militari  from  the  vaults  of  the  banks,  amounts  to 
54,000,000  pesos  or  27,000,000  dollars,  according  to  official 
figures  of  the  Carranza  government. 

In  August,  1919,  the  Secretary  of  the  Treasury  of  the 
Carranza  government  gave  a  statement  to  the  press  to  the  effect 
that  the  national  debt,  for  the  various  items  already  enumerated, 
—  debt  in  the  narrower  sense  of  the  term,  obligations  growing 
out  of  seizures,  forced  loans,  damages,  etc., —  amounted  at  that 
time  to  one  billion  pesos,  or  500,000,000  dollars.  Unfortunately 
this  figure  is  much  below  the  real  figure,  for  we  have  seen  that 
the  responsibilities  of  the  Mexican  nation  merely  on  the  score 
of  contracts  executed  by  the  government,  and  without  taking 
into  account  the  heavy  burdens  which  the  revolution  has  left 
upon  the  country,  amount  to  more  than  the  billion  pesos  acknow- 
ledged by  the  Secretary  of  the  Treasury. 

In  our  enumeration  of  the  items  of  responsibility  growing 
out  of  the  revolution,  we  have  purposely  refrained  from  alluding 
to  those  proceeding  from  the  issues  of  so-called  paper  money. 
This  matter  involves  grave  questions  of  a  moral  and  equitable 
order,  into  which  we  can  not  enter  here.  We  shall  point  out, 
however,  that  these  responsibilities,  in  case  they  exist,  will  be 
found,  we  think,  to  be  far  less  than  the  amounts  usually  quoted, 
and  than  what  speculators  expect. 

Let  us  now  consider  how  we  can  meet  our  debt,  in  the 
strict  sense  of  the  term,  that  is,  the  financial  obligations  of  the 
government  as  represented  by  legally  issued  securities  now  in 
the  hands  of  the  public. 

We  do  not  believe  that  the  productivity  of  Mexico  has  in- 
creased in  the  last  few  years.  The  cattle  industry  has  been 
reduced  to  the  furthest  limits  possible;  agriculture  suffers  be- 
cause of  the  destruction  of  working  material,  because  of  the 
active  emigration  of  farm  laborers  to  the  United  States,  because 
of  insecurity  in  the  fields  and  because  of  the  heavy  burden  of 
new  taxation;  sisal  (henequen),  which  constituted  a  valuable 
source  of  revenue,  is  now  passing  through  a  crisis,  the  outcome 
of  which  no  one  can  foretell;  the  mining  industry  has  suffered 
from  the  state  of  domestic  disorder,  and  if  the  apparent  results 
of  mining  development  have  not  been  wholly  unfavorable  during 
recent  years,  this  is  to  be  attributed  not  so  much  to  an  increase 
in  output,  as  to  the  high  prices  obtained  for  some  metals, 
especially  silver,  as  the  result  of  conditions  wholly  foreign  to 
our  domestic  situation;  almost  all  the  lines  of  communication 


84  — 


which  bring  the  factors  of  production  into  play,  have  run  down 
and  lack  rolling  stock,  being  at  the  same  time  subject  to  frequent 
interruptions  and  to  the  military  needs  of  the  government.  The 
only  source  of  wealth  that  has  prospered,  and  which,  therefore, 
institutes  an  important  source  of  revenue,  is  petroleum. 

It  is  a  fact  that  the  revenues  of  the  federal  government 
have  grown  considerably,  due  to  a  substantial  increase  in 
existing  taxes,  and  to  the  creation  of  new  ones;  but  thus  far 
the  legitimate  and  illegitimate  needs  of  the  government  have 
been  a  whirlpool  which  has  swallowed  up  the  largest  revenue. 
To  this  we  must  add  that  in  the  chaotic  administration  of  the 
public  finances  during  the  days  of  Carranza,  substantial  sums  dis- 
appeared from  the  public  treasury,  without  any  accounting  having 
been  made;  while  it  is  reasonable  to  assume  that  many  sums 
which  should  have  been  paid  into  the  national  treasury  never 
found  their  way  there. 

So  long  as  these  conditions  prevail,  it  will  be  useless  to 
talk  of  settlements  with  our  creditors.  We  stated  in  the  preamble 
of  this  document  that  the  basis  of  all  governmental  labor  must 
be  integrity,  particularly  in  the  handling  of  public  funds.  The 
government  that  succeeded  the  Carranza  regime  announced 
its  purpose  of  purifying  the  financial  administration;  but 
even  were  these  laudable  intentions  carried  out,  so  long  as 
well  recognized  methods  based  on  the  laws  of  economics  applied 
to  our  needs  do  not  take  the  place  of  measures  inspired  by 
a  purely  opportunist  policy  or  by  the  whims  of  the  Secretary 
of  the  Treasury,  the  distrust  of  our  creditors  with  regard  to  the 
Mexican  government  and  people  will  continue  to  be  an  insuper- 
able obstacle  in  reaching  any  settlement  of  our  public  debt  which 
shall  prove  advantageous  and  decorous. 

We  trust  that  the  government  will  be  convinced  of  the 
truth  of  this  statement,  and  that  it  will  be  capable  of  implanting 
in  the  Treasury  Department  methods  based  on  scientific  princi- 
ples and  on  absolute  probity.  With  this  premise  we  shall  briefly 
analyze  the  problem  from  two  points  of  view:  First,  a  settlement 
with  our  creditors;  and  secondly,  a  stimulation  of  the  produc- 
tivity of  Mexico. 

It  is  frequently  said  that  Mexico  imperatively  needs  a  heavy 
loan  to  liquidate  its  debts  and  restore  its  credit.  In  our  judg- 
ment there  is  no  plan  more  difficult  of  realization  nor  more 
anlipatriotic. 

The  hopes  of  the  present  creditors  of  Mexico  are,  whether 


—  85  — 

or  not  .they  so  will  it,  bound  up  in  the  fate  of  the  country. 
Bonds  of  the  Mexican  public,  debt  are  hardly  quoted  on  the 
markets  of  the  world,  and  if  they  are,  it  is  at  ludicrous  rates. 
It  is  reasonable  to  assume  that  the  majority  of  them  are  held 
by  bankers  or  speculators  who  have  been  able  to  accumulate 
them  and  patiently  await  the  moment  of  liquidation.  It  would 
be  a  matter  of  satisfaction  for  these  two  classes  if  Mexico  were 
to  resume  the  payment  of  her  debt,  even  though  the  govern- 
ment only  began  by  meeting  a  fractional  portion  of  its  obliga- 
tions. However  painful  it  may  be  to  have  to  make  the  admission, 
the  fact  remains  that  Mexico  is  bankrupt.  Mexico  is  a  debtor 
with  enormous  possibilities,  but  with  most  discomforting  present 
conditions.  Her  creditors  cannot  be  reconciled  to  the  idea  that 
the  payment  of  present  day  credits  be  post-poned  for  the  benefit 
of  future,  generations,  and  if  they  are  benefited  by  Mexico's 
resumption,  even  though  partial,  of  her  public  debt  service, 
their  state  of  mind  must  be  very  different  from  that  of  a  new 
creditor  who  is  approached  for  funds  at  the  moment  of  bank- 
ruptcy. If  the  new  creditor  risks  his  money  it  will  be  on  the 
double  basis  of  a  very  high  rate  of  interest  which  would  con- 
stitute the  premium  on  the  insurance,  as  well  as  the  interest 
properly  speaking  on  the  capital,  and  some  humiliating  guaran- 
tees to  which  no  self-respecting  Mexican  government  could 
accede. 

Furthermore,  it  should  be  borne  in  mind  that  the  present 
time  is  the  least  propitious  for  Mexico  to  enter  the  market  in 
search  of  a  loan.  The  French  government  has  just  contracted 
loans  at  a  rate  higher  than  its  nominal  rate  of  8  per  cent;  while 
the  British  government  is  compelled  to  pay  higher  rates  of  in- 
terest than  it  has  ever  paid  at  any  time  in  history. 

Accordingly,  the  only  honest,  logical  and  practical  solution 
for  Mexico  and  her  creditors  is  that  the  government  should  invite 
them  to  enter  into  a  settlement,  based  on  absolute  good  faith 
and  a  sincere  readiness  to  pay,  up  to  the  very  last  cent  which 
it  is  physically  possible  to  pay. 

It  would  neither  be  proper  nor  acceptable  to  her  creditors 
if  Mexico  were  to  reduce  the  interest  rate  accruing  on  the  debt, 
so  as  to  make  it  possible  immediately  to  resume  payment  of  this 
service.  What  the  strictest  equity  requires  is  that,  on  the  basis 
of  the  rate  of  interest  stipulated  in  the  various  contracts,  an 
aliquot  part  of  the  interest  due  on  the  various  certificates  of 
indebtedness  be  paid,  the  balance  being  left  as  deferred  interest. 


—  86  — 

Then  year  by  year,  or  in  periods  of  two  to  four  years,  as  the 
country  recovers  its  vitality,  the  portion  of  the  interest  paid 
would  be  increased  under  agreements  between  the  government 
and  representatives  of  the  creditors.  Later,  so  soon  as  the 
interest  payments  were  completely  satisfied,  the  amortization 
of  the  principal  might  be  begun,  unless  by  that  time  conditions 
permit  a  general  settlement  of  the  public  debt  under  new  condi- 
tions favorable  to  the  country. 

We  maintain  that  this  is  the  only  honest,  the  only  patriotic 
course.  Should  a  fresh  debt  be  contracted  at  this  moment, —  on 
onerous  conditions  as  would  inevitably  be  the  case, —  the  dif- 
ficulty would  only  be  postponed  for  a  few  months.  When  Mexico 
is  unable  to  meet  these  new  engagements,  her  credit  would  reach 
a  lower  ebb  than  ever,  inasmuch  as  with  our  freshly  assumed 
new  obligations  not  even  the  strictest  straightforwardness  of 
administration  could  save  us  from  another  bankruptcy. 

The  need  of  a  loan  for  the  rehabilitation  of  the  railroads  is 
frequently  discussed.  We  think  that  not  even  for  this  special 
purpose  should  new  obligations  be  undertaken,  even  assuming 
such  an  operation  possible  in  view  of  the  enormous  respon- 
sibilities now  weighing  on  the  government  with  regard  to  the 
National  Lines.  What  the  government  should  do  without  delay 
is  to  moralize  the  administration  of  the  railroads  and  to  invest 
in  their  reconstruction  that  portion  of  the  revenues  derived  from 
their  operation  that  is  now  turned  into  the  federal  treasury. 
Moreover,  we  hold  that  the  government  should  initiate  with  the 
stockholders  and  bondholders  of  the  National  Railways  the 
negotiations  we  recommend  in  the  preceding  chapter  on  railway 
policy,  so  as  to  reach  a  settlement  which  shall  have  the  double 
advantage  of  restoring  the  efficiency  of  the  railroads  and  of 
liquidating  the  responsibilities  legally  chargeable  to  the  nation. 

The  responsibilities  which  the  banking  institutions  are 
entitled  to  expect  the  government  to  assume  by  reason  of  the 
acts  of  violence  perpetrated  by  the  Carranza  government  may 
be  divided  into  two  chapters:  Those  arising  from  the  seizure 
of  funds,  and  those  growing  out  of  the  illegal  suspension  of  these 
establishments.  Those  of  the  first  group  must  be  paid  in  cash. 
It  is  our  conviction  that  those  of  the  second  category  should  be 
liquidated  through  special  arrangements,  which  will  depend  on 
circumstances  which  it  is  not  possible  now  to  foresee.  We  have 
considered  this  matter  more  in  detail  in  our  remarks  on  the 
reorganization  of  our  banking  system. 


—  87  — 

With  regard  to  the  other  responsibility  for  damages  caused 
by  our  condition  of  disorder,  we  ratify  what  we  have  already 
said  in  the  chapter  on  claims.  We  believe  that  the  law  should 
empower  the  government  to  issue  special  certificates  to  be 
authorized  only  for  such  amounts  as  are  decreed  by  the  claims 
commission  and  the  mixed  commissions.  We  do  not  believe 
it  a  difficult  matter  to  secure  the  assent  of  the  governments 
interested  in  the  claims  of  foreigners,  so  that  payment  of  these 
amounts  may  be  made  in  the  special  bonds  to  which  we  have 
referred.  These  bonds  would  bear  a  modest  rate  of  interest 
after  a  reasonable  date  —  three  or  five  years  from  their  date 
of  issue. 

With  regard  to  the  second  aspect  of  our  economic  problem, 
that  is  to  say,  the  stimulation  of  the  productivity  of  the  country, 
we  are  not  convinced  of  the  efficacy  of  governmental  action  as 
the  chief  factor  of  this  productivity.  We  are  of  the  opinion  that 
the  government  can,  and  should,  lend  its  aid,  possibly  in  a  more 
intensive  manner  than  it  has  heretofore  attempted  to  do;  and 
to  this  end  are  addressed  some  of  the  recommendations  we  have 
made  in  various  chapters  of  this  pamphlet.  But  the  government 
should  assume  an  important  function  in  connection  with  the 
circulation  of  public  wealth,  by  means  of  the  only  factor  which 
can  constitute  the  machinery  of  such  circulation,  namely,  do- 
mestic credit,  establishing  to  this  end  a  banking  system  scien- 
tifically conceived  and  adapted  to  the  needs  of  the  country. 

Merely  by  way  of  illustration  of  the  results  that  may  be 
expected  from  the  establishment  of  a  scientific  banking  system, 
we  shall  mention  here  that  prior  to  the  adoption  of  the  present 
Federal  Reserve  System  in  the  United  States,  the  amount  of 
money  existing  in  the  banks  of  the  country  was  at  times  ten 
times  in  excess  of  that  held  by  British  banks;  and  yet  the  banking 
power  of  the  United  States  was  inferior  to  that  of  England, 
and  the  former  was  constantly  compelled  to  borrow  from  the 
latter.  Since  the  adoption  of  the  Federal  Reserve  System,  the 
United  States  have  been  in  a  position  to  meet  the  tremendous 
financial  needs  of  the  European  war,  to  convert  the  great  Allied 
°owers  into  debtor  nations,  and  later  to  seek  a  readjustment  of 
their  economic  situation  with  less  derangement  than  any  other 
nation. 

In  reorganizing  our  banking  system,  the  first  essential  should 
be  the  authorization  of  banks  of  loans,  discounts  and  deposits, 
the  issue  of  notes,  however,  being  exclusively  under  the  control 


—  88  — 

of  the  government.  Banknotes  form  a  part  of  the  circulating 
medium,  and  the  whole  monetary  system  of  a  nation  requires 
the  effective  control  of  domestic  circulation.  Without  it  there 
is  no  money,  in  the  proper  sense  of  the  term,  as  the  sole  measure 
of  values  in  just  relation  to  the  needs  of  circulation.  The  es- 
tablishment, therefore,  of  a  single  bank  of  issue  is  imperative. 
This  solution  was  not  first  conceived  at  the  Constitutional  Con- 
vention in  Queretaro,  for  preliminary  surveys  had  already  been 
made  by  former  Mexican  governments  along  this  direction,  and 
even  certain  initial  steps  taken. 

The  functions  of  the  single  bank  of  issue  ought  to  be  twofold. 
In  the  first  place,  it  must  act  as  a  bank  of  issue  and  deposit, 
and  designed  to  concentrate  and  distribute  government  funds;  and 
in  the  second  place,  as  a  bank  of  rediscount  which  will  not  deal 
directly  with  the  public,  other  than  in  exceptional  cases,  but 
with  unchartered  banks  operating  throughout  the  Republic. 
By  means  of  this  rediscount  and  through  the  instrumentality  of 
these  banks,  the  single  bank  of  issue  can  distribute  the  benefits 
of  credit,  facilitating  the  advantageous  use  of  energies  that  are 
now  directed  mainly  along  revolutionary  and  destructive  lines; 
and  at  the  same  time  bringing  into  play  forces  that  now  lie 
dormant  and  of  no  avail  to  the  common  good. 

Heretofore,  the  strictly  commercial  credit,  that  is,  the  dis- 
count of  commercial  paper,  has  been  insignificant  in  national 
banks,  to  such  an  extent  that  on  their  balance  sheets  as  of 
December  31,  1910,  that  is  to  say,  prior  to  the  period  of  political 
disorders,  the  item  of  discounts  mlade  by  all  the  banks  in  the 
country  barely  reached  the  negligible  aggregate  of  16,315,669.84 
pesos  or  8,157,834.92  dollars.  This  figure  represents  the  greatest 
charge  that  can  be  brought  against  the  banking  system  then  in 
force.  For  if  the  discounts  did  not  then  reach  a  higher  amount 
it  was  not  because  there  were  no  persons  in  Mexico  who  needed 
to  engage  in  these  operations,  nor  that  among  these  persons 
there  were  not  many  deserving  of  credit.  The  lack  of  dis- 
counts was  due  to  two  main  causes.  In  the  first  place,  the  banks 
dealt  directly  with  the  public  and  monopolized  banking  opera- 
tions under  the  shadow  of  their  franchises.  There  being  no  in- 
dependent banks,  rediscount  did  not  exist;  therefore  those  who 
lacked  influence  with  the  managers  or  directors  of  banks  could 
make  no  use  of  their  credit  and  were  allowed  to  fall  into  the 
hands  of  usurers  who  took  advantage  of  their  own  credit  and 
personal  influence  in  the  banks  to  obtain  funds,  lending  them 


—  89  — 

at  very  high  rates  of  interest.  In  this  disguised  form  of  redis- 
count, the  real  debtor  was  unknown  to  the  bank.  The  second 
reason  to  which  we  attribute  the  negligible  amount  of  discounts 
was  that  the  majority  of  the  debts  in  favor  of  the  banks,  though 
commercial  in  form,  consisted  really  of  long  term  obligations 
renewed  half  yearly  as  a  mere  matter  of  form,  and  which  consti- 
tuted the  operating  capital  of  agricultural  or  industrial  concerns. 
This  situation  was  such  that  had  an  attempt  been  made  to  force 
payment  on  the  expiration  of  the  first  six  months,  the  result 
would  haye  been  a  general  panic,  as  was  clearly  seen  by  the 
mere  announcement  once  made  that  the  government  would  re- 
quire the  banks  to  collect  these  credits. 

These  facts  show  beyond  question  that  the  banking  system 
established  by  law  was  in  practice  fundamentally  misapplied. 

With  these,  circumstances  in  mind  and  inasmuch  as  a  bank 
of  issue  and  rediscount, —  or  single  Bank  of  Issue,  as  we  shall 
continue  to  call  it  for  the  sake  of  simplicity,  —  would  distribute 
the  advantages  of  credit  to  all  parts  of  the  country,  it  is  to  be 
assumed  that  the  real  national  discount  would  considerably  in- 
crease, and  that  the  resources  of  the  Bank  would  be  much  sought 
after  in  fulfilling  this  function  of  domestic  circulation. 

It  is  not  to  be  wondered  at  that  the  Carranza  government 
did  not  succeed  in  three  years  in  organizing  the  single  Bank  of 
Issue.  A  bank  is  an  institution  of  credit  that  cannot  exist  without 
the  confidence  of  the  public.  The  lack  of  scruples  of  this  govern- 
ment in  the  handling  of  public  funds  and  its  attacks  on  private 
property  have  found  expression  in  one  of  the  greatest  evils  in 
the  country:  the  complete  disappearance  of  that  social  asset 
known  as  credit,  the  product  of  moral  and  intellectual  forces 
much  more  valuable  than  money  itself. 

The  subject  under  consideration  is  highly  complex  and 
difficult;  its  factors  are  eminently  technical,  and  if  we  attempted 
to  investigate  them  we  should  be  writing  a  scientific  monograph 
and  not  a  program  of  governmental  action.  The  considerations 
we  have  given  above  seem  to  us  sufficient  to  warrant  the  de- 
finitive abandonment  of  the  banking  system  in  force  before  the 
attacks  made  against  the  banks  by  the  Carranza  government, 
and  the  establishment,  as  the  cardinal  principle  of  the  new 
system,  of  a  single  Bank  of  Issue,  around  which  there  would 
spontaneously  spring  an  indefinite  number  of  private  banks  to 
act  as  agents  in  the  diffusion  of  credit  through  the  valuable 
instrument  of  rediscount.    These    banks    would  be  subject  to 


—  90  — 

certain  rules  of  publicity  which  the  law  would  establish  and  to 
the  effective  inspection  of  the  government,  thereby  assuring 
the  public  the  necessary  guarantees;  but  their  establishment 
would  be  wholly  free. 

Having  indicated  this  general  banking  policy,  the  next  step 
is  to  consider  how  the  single  Bank  of  Issue  would  obtain  the 
necessary  capital  to  begin  operations.  In  the  first  place,  we 
would  condemn  any  attempt  to  obtain  this  capital  by  means  of 
a  foreign  loan,  since  in  this  way  the  Bank  of  Issue,  and  to  a 
certain  extent  the  Mexican  government,  would  be  under  foreign 
financial  control.  Without  attempting  to  outline  the  steps  to  be 
taken  to  obtain  the  initial  capital,  —  since  they  would  depend 
on  the  circumstances  of  the  moment,  —  we  would  say,  that 
the  most  practical,  and  at  the  same  time  most  equitable  method, 
would  be  to  allow  the  former  banks  of  issu'e  preference  in 
subscribing  to  the  capital  stock  of  the  single  Bank  of  Issue. 
This  would  be  but  the  natural  application  of  the  policy  of  inte- 
grity which  ought  to  animate  the  actions  of  the  government, 
since  if  by  virtue  of  the  creation  of  the  Bank  of  Issue  the  former 
banks  must  disappear,  —  at  any  rate  as  banks  of  issue,  —  it  is 
only  just  that  they  should  be  afforded  the  advantage  of  becoming 
interested  in  the  new  institution. 

We  shall  not  attempt  to  enter  into  the  details  of  the  ne- 
gotiations which  the  Mexican  government  would  have  to  un- 
dertake with  the  former  banks  of  issue,  since  little  would  be 
gained  by  speculating  on  more  or  less  hypothetical  conditions. 
The  essence  of  our  recommendations  rests  in  that,  for  the 
mutual  advantage  of  government  and  banks,  an  effort  be  made 
to  reach  a  settlement  as  to  the  responsibilities  of  the  Nation 
in  favor  of  the  banks,  which  shall  leave  them  or  their  share- 
holders directly  interested  in  the  single  Bank  of  Issue.  A 
condition  of  any  settlement  must  be,  however,  that  the  govern- 
ment bind  itself  to  reimburse  the  banks  in  cash  for  the  amounts 
forcibly  and  arbitrarily  taken  from  their  vaults  by  the  Carranza 
government. 

But  how  can  this  latter  condition  be  met  in  the  present 
state  of  the  public  finances?  It  would  be  idle  to  assume  that 
the  government  could  pay  out  at  once  the  fifty-four  million 
pesos  that  Carranza  seized;  but  we  have  no  doubt  that  it  will 
be  in  a  position  to  reimburse  them  within  a  reasonable  period, 
by  resorting  to  the  extraordinary  measure  of  levying  a  tem- 
porary additional  tax  on  those  exports  which  could  bear  such 


—  91  — 

a  tax  without  injury  to  the  national  industry.  The  proceeds  of 
this  additional  tax  would  be  prorated  among  the  banks  de- 
spoiled, and  would  cease  to  be  levied  on  the  exports  the  very 
minute  that  the  purpose  for  which  it  was  created  had  been 
satisfied. 

Independently  of  the  process  outlined  above,  subscriptions 
to  the  capital  stock  of  the  Bank  of  Issue  would  be  opened  to 
independent  financial  institutions  and  to  the  public  in  general. 
We  do  not  delude  ourselves  with  the  notion  that  this  procedure 
would  result  in  the  collection  of  one  hundred  to  two  hundred 
million  pesos  frequently  heard  in  this  connection  and  which  in 
our  judgment  would  be  wholly  unnecessary.  The  bank  might 
begin  to  operate  with  modest  resources,  to  be  steadily  increased 
as  the  country  enters  more  and  more  along  the  path  of  de- 
velopment and  prosperity. 

We  have  said  that  the  single  Bank  of  Issue  will  fulfill  two 
radically  distinct  functions:  A  strictly  banking  function  charac- 
terized by  discounts,  exchanges  and  deposits,  and  the  function 
of  the  issuance  of  bills.  The  latter  will  be  exclusively  under  the 
control  of  the  government;  accordingly  the  exchange  and  dis- 
count department  of  the  bank,  although  independently  adminis- 
tered by  the  officers  of  the  Bank,  should  be  subordinated  to  the 
rulings  of  the  government  in  all  matters  relating  to  issue. 

Both  through  the  form  we  have  outlined  for  the  collection 
of  the  capital  stock  of  the  Bank,  as  well  as  because  of  the  inter- 
vention of  the  government  in  its  function  as  a  bank  of  issue,  the 
Bank  would  be  eminently  a  national  institution.  Furthermore 
on  its  board  of  directors  there  should  be  a  majority  of  Mexican 
citizens.  In  this  connection,  we  believe  that  the  president  and 
manager  of  the  Bank  should  always  be  Mexican  citizens,  and 
that  the  number  of  foreigners  on  the  board  of  directors  should 
never  exceed  one-third  of  the  total  number  of  members. 

Among  the  services  to  be  rendered  by  the  Bank  should  be 
the  concentration  of  the  funds  of  the  Federal  Government  col- 
lected throughout  the  country  and  their  disbursement  under  in- 
structions of  the  Treasury  Department.  Among  other  advantages, 
this  arrangement  would  provide  for  the  facilitation  of  the  circula- 
tion of  the  bills  of  the  Bank  of  Issue,  which  will,  however,  be 
redeemable  at  sight.  It  will  furthermore  permit  the  creation  of 
other  institutions  of  credit,  without  the  need  of  using  the  metallic 
reserve  of  the  Bank,  thereby  leaving  a  balance  available  for 
other  purposes. 


—  92  — 

The  resources  of  the  Bank  should  not  remain  idle.  In 
view  ot  the  need  of  capital  in  Mexico,  it  is  reasonable  to  assume 
that  the  best  investment  of  funds  can  be  made  in  the  Republic 
itself.  And  yet,  if  we  are  not  to  fall  into  costly  error,  only  after 
long  experience  can  any  substantial  amounts  be  taken  from  the 
Bank  and  used  in  promoting  institutions  of  agricultural  credit, 
whether  of  mortgage  or  of  promotion. 

In  condemning  any  resort  to  foreign  loans  to  obtain  the 
capital  of  the  Bank,  we  have  borne  in  mind  the  immediate  effect 
which  such  an  operation  would  have  upon  exchange.  The  system 
we  advocate,  on  the  other  hand,  would  stimulate  the  increase 
of  rates  on  foreign  exchange.  This  situation,  however,  would 
not,  as  we  believe,  be  prejudicial  to  the  progress  of  Mexico,  but 
would  rather  stimulate  production,  besides  having  other  incidents 
which  would  react  favorably  on  the  economic  situation. 

No  program  of  national  reconstruction  would  be  complete 
which  omitted  the  important  subject  of  taxation.  And  yet  dif- 
ferent circumstances  conspire  to  prevent  our  making  more  than 
a  general  reference  to  the  topic.  In  the  first  place,  we  lack  the 
essential  premise,  namely,  reliable  statistics  covering  a  suffi- 
ciently long  period.  The  economic  phenomena  in  Mexico  have 
undergone  various  changes  due  to  domestic  revolution  and  dis- 
order and  to  the  complex  effects  of  the  European  War.  In  the 
circumstances,  any  attempt  to  counsel  a  specific  line  of  action 
would  lead  to  error. 

It  is,  of  course,  evident  that  the  Carranza  administration 
has  imposed  upon  the  tax  payers  burdensome  taxes,  some  of 
which,  —  such  as  the  50  per  cent  quota  of  the  so-called  federal 
tax,  —  should  be  radically  modified,  and  that  there  are  other 
taxes  which,  while  ante-dating  the  Carranza  government,  should 
definitely  disappear,  either  because  they  are  irritating  and  in- 
quisitorial in  character,  or  because  they  are  in  conflict  with  all 
economic  principles.  Certain  taxes  are  the  out-growth  of  the 
vicious  practice  of  the  federal  government  in  restricting  the 
economic  activities  of  the  various  states,  by  levying  special  taxes 
thereon,  so  soon  as  they  attained  any  importance  —  a  system, 
not  only  in  conflict  with  our  federal  pact,  but  unfair  and  un- 
economic. An  analysis  of  our  taxation  from  the  standpoint  of 
accepted  legal  classifications  might  readily  be  made;  but  such 
2  survey  would  not  lead  to  any  practical  result,  because  we  are 
unable  to  make  specific  recommendations. 

In  a  general  way,  we  may  say  that  if  the  reconstruction  of 


—  93  — 

Mexico  rests  fundamentally  on  the  solution  of  her  economic 
problems,  or,  in  other  words,  if  Mexico  needs,  above  all  things 
else,  to  mobilize  all  her  sources  of  credit  so  as  to  intensify 
agricultural  production,  then  a  sound  taxation  system  should 
have  this  supreme  purpose  always  in  mind. 

Our   conclusions   on    the   subject   treated    in    this    chapter 
follow: 

The  solution  of  the  economic  and  financial  problem  of  Mexico 
lies  in  the  settlement  of  its  pecuniary  responsibilities  and  in  the 
stimulation  of  its  sources  of  wealth,  with  a  view  to  increase  produc- 
tion, especially  agricultural. 

However  painful,  we  must  recognize  that  the  country  is  bank- 
rupt, and  that  the  resources  at  its  command,  now  and  for  a  certain 
number  of  years  to  come,  are  inadequate  to  warrant  the  immediate 
payment  of  her  obligations,  after  meeting  the  necessary  expenditures 
for  the  administration  of  public  affairs. 

It  seems  to  us  evident  that  the  government  should  not  contract 
new  debts  in  carrying  out  its  part  in  reconstruction.  We  need,  beyond 
all  question,  foreign  capital;  and  we  should,  therefore,  give  it  every 
encouragement  to  invest  in  Mexican  enterprises;  but  such  capital 
should  come  to  us  through  the  spontaneous  action  of  private  initia- 
tive, with  full  legal  safeguards. 

Accordingly,  we  condemn  the  economic  policy  of  the  govern- 
ments emanating  from  the  Queretaro  constitution  —  a  code  conceived 
in  a  spirit  of  hostility  to  foreign  capital  and  to  everything  foreign. 
The  first  step  is  the  repeal  of  laws  which  oppress  capital,  and  the 
confiding  of  the  administration  of  public  affairs  to  upright  men, 
capable  of  understanding  the  needs  of  the  people  and  the  action 
of  economic  laws.  Once  this  has  been  assured,  the  government  may, 
by  means  of  the  national  resources,  do  its  share  in  the  task  of  re- 
construction, and  may,  in  no  very  remote  future,  comply  with  all 
its  outstanding  obligations.  We  go  still  farther;  it  is  a  duty  of 
every  really  patriotic  government  to  assure,  by  means  of  a  policy 
such  as  we  suggest,  the  economic  independence  of  Mexico  and  thus 
pave  the  way  for  its  advancement. 

To  this  end,  it  will,  furthermore,  be  necessary  to  obtain  from 
our  creditors  a  reasonable  extension,  not  the  compulsory  and  ir- 
regulated  extension  we  have  been  enjoying,  but  one  expressly  agreed 
upon  by  the  parties.  By  virtue  of  this  arrangement,  the  govern- 
ment should  immediately  begin  paying  a  part  of  the  interest  on 
all  bonded  indebtedness,  the  balance  of  the  interest  being  left  as 
deferred  interest.  The  aliquot  part  of  the  interest  should  be  in- 
creased year  by  year,  or  on  longer  terms  if  agreed  upon,  until  the 
service  can  be  wholly  resumed,  or  until  the  conditions  of  the  country 
and  of  the  money  markets  of  the  world  allow  the  making  of  special 
arrangements  on  the  various  classes  of  bonded  debt  or  a  general 
settlement  covering  all  kinds  of  indebtedness. 

So,  too,  we  condemn  as  antipatriotic  and  anti-economic  every 


94 


effort  directed  to  secure  a  new  loan  to  liquidate  outstanding  debts. 
A  new  loan  would  entail  greater  burdens  than  those  we  now  can 
bear,  and  would  mean  large  commissions  to  bankers  or  agents,  a 
heavy  discount  on  the  bonds,  and  a  high  interest  rate.  Again,  since 
those  making  the  loan  would  not  accept  the  ordinary  guarantees, 
which  have  proved  to  be  unavailing  in  our  state  of  anarchy,  we 
should  be  forced  to  give  other  guarantees  which  would  be  derogatory 
to  our  national  dignity.  With  our  obligations  increased,  we  should 
soon  be  in  the  position  of  not  being  able  to  fulfill  them,  and  be 
confronted  with  the  danger  of  having  meted  out  to  us  the  same 
fate  as  other  insolvent  nations  of  the  American  continent  have 
already  met. 

Legitimate  claims  growing  out  of  our  condition  of  disorder 
should  be  paid  in  special  bond  issues;  it  is  reasonable  to  hope 
that  the  foreign  governments  interested  in  such  claims  will  accept 
this  method  of  payment.  The  bonds  would  be  redeemable  at  long 
terms,  and  bear  no  interest  until  after  an  accepted  period. 

The  responsibilities  of  the  government  to  the  creditors  of  the 
National  Railways  should  be  the  subject  of  a  special  settlement,  as 
outlined  in  our  chapter  on  railroads.  In  no  circumstances  whatever, 
should  a  new  loan  for  the  rehabilitation  of  the  railroads  be  made, 
since  the  most  advantageous  arrangement  for  the  country  in  this 
respect  is  an  effort  on  the  part  of  the  government  to  be  released 
from  the  burdens  it  has  assumed  in  regard  to  the  National  Lines. 
A  fresh  loan  would  merely  add  to  these  burdens. 

We  believe  that  the  government  should  be  an  important  factor 
in  fostering  national  production.  Among  other  functions,  it  must 
play  one  important  role,  namely,  to  expand  and  disseminate  credit 
by  means  of  a  banking  system  different  from  that  which  existed  in 
Mexico  prior  to  the  Carranza  revolution.  The  right  of  issue  should 
be  confined  to  a  single  institution,  in  whose  strictly  banking  func- 
tions the  government  should  have  no  intervention,  although  the  issue 
of  notes  would  be  under  the  direct  control  of  the  government. 
This  bank  should  not,  as  a  general  rule,  deal  directly  with  the 
public,  but  operate  through  private  banks  to  be  established  with 
entire  freedom,  although  remaining  subject  to  the  supervision  and 
publicity  required  by  law  for  the  protection  of  the  public's  interest. 
The  Bank  of  Issue  would  distribute  its  credit  throughout  the  Re- 
public, through  the  process  of  rediscount,  and  by  the  concentration 
and  distribution  of  public  moneys  collected  in  different  parts  of 
the  country.  The  president,  manager,  and  not  less  than  two-thirds 
of  its  directors  should  be  Mexican  citizens. 

We  believe  that  the  capital  stock  of  the  Bank  should  not  be 
obtained  through  a  foreign  loan,  since  the  contraction  of  such  a 
loan  would  be  both  anti-patriotic  and  anti-economic,  and  would, 
moreover,  rob  the  institution  of  its  national  character.  It  is  our 
judgment  that  the  best  means  of  initiating  the  subscription  to  the 
capital  stock  of  the  Bank  would  be  to  invite  the  former  banks  to 
subscribe,  in  cash,  a  part  of  this  capital  stock.  The  government 
should,  sooner  or  later,  enter  into  arrangements  with  these  banks; 


—  95  — 

and  since  the  establishment  of  the  single  Bank  of  Issue  would  de- 
finitely deprive  them  of  the  character  of  banks  of  issue,  it  is  an 
act  of  justice  to  offer  *hem  the  opportunity  to  become  interested 
in  the  new  institution. 

The  government  should  reimburse  the  former  banks  of  issue 
the  amounts  forcibly  taken  from  them  by  the  Carranza  administra- 
tion. To  this  end,  we  propose  that,  until  such  time  as  the  conditions 
of  the  public  treasury  allow  a  better  arrangement,  there  be  used  for 
this  reimbursement,  funds  obtained  from  an  additional  tax,  —  transi- 
tory in  character,  —  on  certain  exports  which,  because  of  the  high 
prices  prevailing  abroad,  warrant  such  a  surcharge. 

We  advocate  a  general  revision  of  our  tax  laws,  so  as  to  make 
them  more  equitable  and  more  in  consonance  with  economic  principles. 
A  complete  revision  is  particularly  urgent  in  import  and  export 
duties,  since  the  rates  now  in  force  follow  no  system,  and  are  based 
either  on  a  wholly  opportunist  viewpoint,  or  on  the  imperative  need 
of  funds,  or,  again,  on  the  immoral  purpose  of  favoring  certain  interests 
or  persons.  No  bill  embodying  changes  in  tariff  rates  should  be  in- 
troduced by  the  Executive  into  Congress  unless  the  proposed  measure 
is  made  public  well  in  advance,  so  that  all  who  believe  their  interests 
affected  may  be  heard  on  the  subject.  Futhermore,  the  Treasury  De- 
partment should  call  special  meetings  of  representatives  of  the  different 
organizations  or  lines  of  business  more  directly  interested  in  the  bill,  so 
that  a  frank  discussion  between  themselves,  and  the  representatives 
of  the  government,  may  be  had  as  to  the  advantages  and  disad- 
vantages of  the  changes  proposed. 

We  denounce  the  system  of  the  grant  of  extraordinary  powers 
to  the  Executive  in  the  Department  of  Finance,  as  both  contrary 
to  the  constitution  and  incompatible  with  the  essence  of  democratic 
government,  and  as  a  fertile  pretext  for  immoral  and  scandalous 
speculation.  During  the  Carranza  administration,  the  Executive 
continually  legislated  in  tax  matters,  —  no  less  than  in  other  matters 
not  pertaining  to  the  Department  of  Finance,  —  even  when  Congress 
was  in  session;  and  this  situation,  inconceivable  in  a  constitutional 
regime  and  in  circumstances  of  orderly  government  and  political 
liberty,  continues  under  the  present  administration.  Many  state 
governors  are,  in  turn,  invested  with  similar  powers.  We  protest 
against  this  form  of  tyranny  which  permits  the  Executive  Power 
to  dispose  of  the  property  of  citizens,  and  to  disturb  by  a  mere 
whim,  the  economic  regime  of  the  Republic.  Such  a  practice  con- 
stitutes the  most  humiliating  abdication  of  its  inherent  powers  by 
Congress.  The  national  legislature  thus  not  only  violates  the  constitu- 
tion in  granting  such  extraordinary  powers,  but  is  false  to  the  faith 
which  the  people  have  reposed  in  it  as  the  guardian  of  their  interests. 


XV 
THE    AGRICULTURAL    PROBLEM 

"PREJUDICE  is  certain  to  be  stirred  when  one  hears  the  ex- 
*■  pression  "  Mexican  Land  Problem."  It  is  an  expression 
likely  to  cause  inaccurate  impressions.  The  so-called  "  land 
problem  "  is  only  the  problem  of  agriculture  in  Mexico.  In  its 
solution  are  involved  the  assurance  of  food  supply,  that  is,  the 
life  of  the  people,  and  the  real  national  wealth. 

We  indicated  in  the  preamble  of  this  essay  that  the  mining 
industry,  to  which  Mexico  owes  its  reputation  of  being  one  of 
the  richest  countries  in  the  world,  does  not  represent  our  true 
wealth.  Mexico  does  not  enjoy,  except  indirectly,  the  proceeds 
from  this  industry.  The  product  emigrates  from  the  country 
almost  entirely;  accordingly,  the  profits  from  the  industry  are 
not  distributed  in  the  country  except  in  the  rare  cases  in  which 
the  mines  are  operated  by  Mexican  capital.  What  we  say  of 
the  mining  industry  is  true,  in  part,  of  petroleum,  the  profits 
from  which  go  to  a  large  extent  abroad,  after  the  royalties 
generally  reserved  by  Mexican  landowners  are  deducted. 

Deceived  by  this  false  concept  of  our  immense  mineral  wealth 
and  believing  that  the  agricultural  resources  of  Mexico  are  like- 
wise enormous,  we  infer  that  the  state  of  misery  in  which  the 
great  majority  of  our  people  live  is  due  to  the  unreasonable 
cupidity  of  the  landowning  class,  who,  having  cornered  the  agri- 
cultural resources  for  their  own  benefit  regard  with  criminal  in- 
difference the  abject  condition  of  the  great  mass  of  the  people. 

The  truth  is  that  Mexico  is  today  a  poor  country,  from  an 
agricultural  point  of  view,  and  that  the  alleged  land  monopoly  of 
the  land-owning  class  is  a  most  painful  evidence  of  poverty. 
The  reasons  for  this  state  of  things  are  somewhat  complex;  and 
we  now  proceed  to  examine  them. 

It  is  common  knowledge  that  the  United  States  leads  all 
other  countries  in  mineral  wealth.  Yet,  if  we  compare  the  mining 
output  of  the  United  States  with  its  agricultural  production,  we 
shall  see  an  enormous  difference  in  favor  of  the  latter,  2,300,- 
000,000  (dollars)  and  10,500,000,000  (dollars),  respectively  in 
1915.     Unfortunately,  the  absolute  lack  of  statistical   data  on 


—  98  — 

agriculture  in  Mexico  renders  it  impossible  to  compare  its  agri- 
cultural production  with  its  mineral  output;  but  we  can  say  that, 
compared  with  the  United  States,  we  are  in,  not  only  a  relative, 
but  an  absolute  condition  of  inferiority  in  the  matter  of  our 
agricultural  yield.  It  will  be  sufficient  for  us  to  cite  the  figures 
compiled  by  the  Director  of  the  Agricultural  Bureau  of  our 
Department  of  Fomento  which  show  that,  while  the  average 
yield  of  wheat  per  hectare  in  the  United  States  is'  1,068  kilo- 
grams and  that  of  corn  1,302  kilograms,  the  average  yield  in 
Mexico  from  the  same  area  of  land  is  292  and  650  kilograms, 
respectively. 

The  stupendous  yield  of  its  agricultural  products  furnishes 
the  key  to  the  enormous  wealth  of  the  United  States.  While  the 
mining  industry  benefits  directly  only  a  small  number,  agri- 
culture scatters  its  blessings  among  a  great  mass  of  the  popula- 
tion. Did  the  character  of  this  work  permit,  we  might  attempt 
an  explanation  of  many  of  the  surprising  phenomena  of  Amer- 
ican life,  and  show  that  they  have  their  origin  in  the  magnitude 
and  type  of  their  agricultural  output,  toward  which  nature  has 
contributed  in  a  measure  probably  not  equalled  elsewhere.  We 
should  likewise  explain  how  the  poverty  of  our  agriculture  is 
the  underlying  cause  of  many  peculiarities  of  Mexican  life,  be- 
ginning with  the  high  mortality  occasioned  by  gastro-intestinal 
diseases,  —  due  to  the  scarcity  and  inferior  quality  of  food,  — 
and  ending  with  the  political  agitations  and  banditry  which  make 
men  appear  at  times  fierce,  at  times  heroic,  who  are  merely 
human  beings  crazed  by  famine  or  by  their  desperation  to  eke 
out  a  living  with  less  hardships. 

The  agricultural  problem  is,  therefore,  a  humanitarian  and 
patriotic  problem;  a  matter  of  life  and  death  to  our  masses.  It 
is  then  criminal  to  convert  it  into  a  war  cry  and  to  make  it  a 
rallying-point  for  political  strife.  Of  all  our  problems  it  is  that 
which  requires  the  most  dispassionate  and  scientific  study,  for 
on  its  wise  solution  depend  the  prosperity  and  progress  of  the 
great  majority  of  the  Mexican  people. 

If  we  were  seeking  to  emphasize  how  unpatriotic  and  in- 
human it  is  to  convert  a  problem  of  scientific  cooperation  into 
a  pretext  for  internecine  warfare,  it  would  suffice  us  to  call  at- 
tention to  the  fact  that  mortality  and  emigration  have  increased 
in  Mexico  as  the  direct  result  of  a  revolution  avowedly  under- 
taken to  benefit  the  poorer  classes  dependent  on  our  meagre 
agricultural  production. 


99 


Before  we  may  properly  formulate  sound  recommendations 
on  a  problem  of  such  gravity  as  this,  we  must,  at  least,  make  a 
passing  survey  of  its  chief  factors. 


The  Mexican  Republic  has  enormous  areas  cultivated 
poorly  or  not  at  all.  This  is  evident  even  in  districts  where  the 
land  is  very  fertile  but  the  climate  hot  and  insalubrious,  render- 
ing such  regions  uninhabitable  to  persons  from  elsewhere,  and 
decisively  enervating  the  character  of  the  inhabitants.  These 
lands  would  be  rich  if  the  considerable  capital  required  for  their 
sanitation  were  to  be  invested  in  them. 

In  other  zones,  such  as  the  districts  of  Sonora  and  Sinaloa, 
which  correspond  to  the  western  slope  of  the  Sierra  Madre,  the 
climate  is  healthy  and  the  land  fertile;  but  here  too,  a  large  in- 
vestment of  capital  in  irrigation  projects  is  necessary  before  the 
land  can  be  brought  under  agriculture. 

In  large  tracts  of  the  central  tableland  the  land  is  equally 
good  and  the  climate  equally  favorable;  but  this  land  is  now 
largely  impoverished  through  prolonged  cultivation  and  the  in- 
sufficiency of  water.  The  success  of  crops  in  these  districts 
depends  on  the  contingency  of  rain  which  falls  but  three  or  four 
months  of  the  year;  while  it  not  uncommonly  happens  that  the 
rains  are  lacking  at  the  moment  most  critical  in  the  growth  of 
vegetation  or  else  fall  in  such  abundance  as  to  ruin  cultivation 
and  to  sweep  away  the  crops.  Furthermore,  the  altitude  causes 
rapid  evaporation,  thereby  increasing  the  uncertainty  of  crops. 

There  are  other  extensive  tracts  in  the  so-called  northern 
tableland  that  must  be  classified  among  the  arid  or  semi-arid 
lands,  which  can  with  difficulty  be  cultivated  because  of  the 
small  rainfall  and  the  scarcity  or  complete  lack  of  water  for 
irrigation  purposes.  These  obstacles  cannot,  of  course,  be  re- 
moved without  the  investment  of  large  sums  of  money. 

Nor  are  these  the  only  disadvantages  weighing  upon  our 
national  agriculture.  We  have  only  a  very  few  rivers,  navigable 
at  all  or  for  any  distance.  Overland  travel  is  difficult,  almost 
all  the  highways  being  in  a  poor  state,  and  many  being  impas- 
sable except  on  foot  or  horseback.  Prior  to  the  era  of  railroad 
building  wheat  raised  in  Puebla  could  not  compete  in  Vera  Cruz 
with  that  imported  directly  from  Boston  and  New  York,  because 
of  high  freight  rates.  The  consumption  of  farm  produce  is  still 
wholly  local  in  places  lacking  railroad  communication,  so  much 


—  100  — 

so  that  the  development  of  agriculture  in  Mexico  depends  to  a 
large  extent  on  the  construction  of  railroads,  which  in  turn  de- 
mands a  large  outlay  of  capital. 

There  are  regions  in  the  country  where  all  favorable  ele- 
ments concur:  land,  water,  sanitation  and  communication. 
These  areas  are,  however,  small,  and  hence  are  called  upon  to 
bear  the  burden  of  furnishing  food  for  the  whole  nation.  The 
agricultural  output,  therefore,  is  determined  by  the  demand  for 
staples.  This  accounts  for  the  fact  that  some  of  these  tracts 
are  devoted  to  the  cultivation  of  wheat,  despite  the  ravages  of 
various  tropical  plagues  on  this  cereal;  but  the  demand  for  this 
crop  causes  others  to  be  neglected  which,  while  not  subject  to 
the  danger  of  plagues,  are  less  in  demand  as  not  being  so  neces- 
sary as  a  staple  to  the  people.  The  farmer  is  thus  bound  down 
by  the  routine  of  immemorial  practice;  and  the  land  daily  be- 
comes more  and  more  impoverished. 

Three  deductions  may  be  drawn  from  the  foregoing  facts: 

First.  That  in  view  of  the  topographical,  hydrographic  and 
climatological  conditions  in  Mexico,  agriculture  cannot  be  ap- 
preciably improved  except  through  the  investment  of  large 
capitals.  Any  attack,  therefore,  on  capital  in  Mexico  is  a  direct 
attack  upon  the  interests  of  the  people. 

Secondly.  For  the  same  reason,  small  landed  property,  de- 
voted to  intensive  cultivation,  has  only  been  possible  on  a  small 
scale,  and  as  a  result  our  agriculture  has  had  to  be  of  the  capital- 
istic or  large  land-owning  class,  —  latijundista,  —  to  use  the  ex- 
pression made  so  familiar  by  the  revolution. 

Thirdly.  The  backwardness  of  Mexican  agriculture  is  due 
to  natural  and  economic  phenomena  to  a  large  extent  inde- 
pendent of  any  action  on  the  part  of  the  class  owning  great 
estates. 

To  those  who  believe  that  the  Mexican  land-owner  is 
avaricious,  and  exploits  the  misery  of  the  majority  of  the  in- 
habitants, it  will  no  doubt  be  a  surprise  to  learn  that  the  situa- 
tion of  the  land-owner  is  such  that  in  the  majority  of  cases, 
when  he  contracts  a  debt  and  can  only  rely  on  the  produce  of 
his  farm  to  liquidate  it,  he  usually  dies  without  paying  the  debt, 
and  his  only  chance  of  being  released  lies  in  selling  the  land  to 
someone  with  more  capital.  This  is  the  condition  of  the  Mexican 
land-owner,  as  described  by  the  publicists  of  the  18th  century, 
and  this  it  is  today. 

It  may  be  argued  that  the  landowner  is  responsible  for  his 


—  101  — 

situation  because  of  the  use  of  antiquated  methods.  Those 
however,  who  are  familiar  with  our  farm  life,  will  know  that 
there  are  many  farmers  who  would  welcome  the  use  of  modern 
farm  implements,  and  modern  chemical  methods,  but  who  fail 
because  of  the  difficulties  inherent  in  the  situation,  not  the  least 
of  which  are  the  lack  of  capital  and  the  refusal  of  the  natives 
to  try  new  methods. 

These  circumstances  induce  the  land-owner  to  subdivide  his 
lands,  whenever  the  opportunity  offers,  thus  constituting  a  power- 
ful factor  in  favor  of  subdivision  of  large  landed  estates  which 
will  be  carried  out  when  there  are  no  other  reasons,  not  inherent 
in  the  problem  itself,  which  stand  in  the  way. 

In  the  last  years  of  the  Diaz  administration  the  subdivision 
of  lands  had  been  begun  under  such  favorable  auspices  as  to 
offer  the  hope  that  it  might  soon  become  general.  The  banks 
furnished  the  farmers  with  the  necessary  credit  to  the  neglect  of 
their  strictly  banking  functions,  thereby  contributing  to  the  sub- 
division of  large  properties,  since  they  demanded  no  mortgage 
guaranty  for  their  loans.  It  is  well  known  that  our  mortgage 
laws  establish  the  principle  of  the  indivisibility  of  the  guaranty. 
This  acts  as  an  obstacle  in  the  subdivision  of  any  mortgaged 
property,  since  the  credit  secured  by  the  mortgage  affects  each 
and  everyone  of  the  lots  into  which  the  whole  estate  is  divided. 
The  movement  in  favor  of  the  subdivision  of  property  suffered  a 
setback  when  the  Treasury  Department,  in  February  1908,  ruled 
that  banks  should  confine  their  operations  to  discount  for  a  term 
of  six  months.  It  was  later  wholly  suspended  when  the  political 
upheaval  destroyed  every  form  of  credit  in  the  country. 

We  endorse  the  view  commonly  held  as  to  the  advisability 
of  subdividing  large  landed  estates,  not  through  antagonism  to 
the  land-owning  classes,  —  a  sentiment  which  we  have  shown 
to  be  unjustified.  —  but  because  small  landed  property  in  the 
hands  of  men  with  adequate  financial  resources  will  contribute 
to  the  transformation  of  our  social  life,  increasing  the  staples 
of  food  and  elevating  the  moral  condition  of  our  millions  of 
farm  hands. 

We  do  not,  of  course,  advocate  the  extinction  of  large  landed 
estates  that  are  indispensable  for  certain  crops  and  for  stock 
laising.  We  likewise  do  not  pass  over  the  arguments  often  made 
in  favor  of  large  holdings  because  of  the  constantly  increasing 
use  of  farm  machinery;  but  we  realize  the  exigencies  of  the  pre- 
sent day,  and  feel  that  the  promotion  of  small  land  holdings 


—  102  — 

will  be  a  decisive  factor  in  our  evolution.  The  farmer  who  per- 
sonally cultivates  his  land  becomes  closely  identified  with  it,  ob- 
tains the  whole  yields  that  it  is  possible  to  expect  by  the  exercise 
of  his  knowledge,  and  the  use  of  his  labor.  He  accordingly 
vigorously  defends  his  land  and  everything  relating  to  it.  Such 
a  farmer  would  be  not  only  an  important  element  in  increasing 
agricultural  output,  but  a  decisive  factor  in  the  maintenance  of 
order,  a  balance  wheel  offsetting  the  anarchy  that  engulfs  us. 
The  democratization  of  the  land  and  the  democratization  of  the 
rural  classes  appear  to  us  indispensable  conditions  to  political 
democracy. 

The  problem  of  the  subdivision  of  land  is  also  a  problem  of 
colonization,  which  offers  its  own  peculiar  difficulties.  To  col- 
onize exclusively  with  nationals  would  be  tantamount  to  foster- 
ing on  a  small  scale  the  formation  of  small  land  holdings,  be- 
cause there  are  few  farmers  available,  even  though  many  of 
them  may  become  so  after  proper  training.  Unfortunately,  this 
aspect  of  the  problem  is  complicated  with  the  emigration  of  our 
best  fields  workers,  who  are  every  day  leaving  in  greater  numbers 
for  the  United  States  in  search  of  safety  to  their  persons,  and  a 
sure  means  of  livelihood,  which  their  native  land  has  not  been 
able  to  afford  them.  Those  who  do  emigrate  are,  of  course,  the 
most  ambitious,  the  most  intelligent,  the  strongest,  those  that 
would  offer  most  hope  of  the  transformation  of  our  agricultural 
regime.  When  our  fields  suffered  the  scourge  of  anarchy  which 
the  revolution  brought  in  its  train,  the  same  phenomenon  took 
place  as  was  seen  when  the  paper  money  drove  out  the  gold 
currency:  It  was  Gresham's  law  applied  to  man. 

In  order  to  detain  this  current  of  emigration,  once  order  has 
been  restored,  the  inhabitants  of  our  fields  must  be  afforded  the 
opportunity  of  becoming  independent  settlers.  At  the  same  time, 
however,  efforts  should  be  made  to  establish  settlements  of  mem- 
bers of  the  Caucasian  race  who  by  their  contact  with  the  native 
settlers  might  offer  them  the  advantages  of  the  example  of  su- 
perior culture.  The  foreign  settler  that  would  most  meet  our 
needs  is  the  small  farmer  who  is  ready  to  emigrate  to  countries 
where  land  is  cheaper  than  in  his  own  country,  and  not  im- 
poverished by  the  incessant  cultivation  of  years. 

We  have  now  pointed  out  the  chief  factors  of  the  problem, 
in  so  far  as  they  relate  to  land,  capital,  and  man.  We  shall  now 
allude  to  another  important  factor,  namely,  the  law  which  re- 
gulates the  relations  among  these  three  factors. 


—  103  — 

The  Mexican  legislator  has  only  imperfectly  grasped  certain 
national  needs  because  of  his  tendency  to  perpetuate  legal  tradi- 
tions, that  had  their  origins  in  times  differing  from  our  own. 
Civil  law,  substantive  and  procedural  alike,  both  as  regards  the 
registration  of  title  as  well  as  the  transfer  of  ownership,  is  full 
of  technicalities,  which  presuppose  a  training  and  resources 
wholly  beyond  the  reach  of  the  great  majority  of  Mexicans.  This 
is  a  reason,  cooperating  with  those  natural  and  economic  causes 
we  have  already  described,  which  renders  the  creation  of  small 
landed  property  difficult,  and  the  condition  of  small  farmers  quite 
precarious. 

Other  reasons  combine  to  bring  about  the  same  result,  but 
the  necessity  of  reducing  this  work  obliges  us  to  refer  to  them 
merely  in  the  conclusions  we  have  formulated. 

We  can  not,  however,  fail  to  present  certain  considerations 
on  the  policy  initiated  by  the  Carranza  government  in  settling 
the  problem  we  are  now  considering.  The  Queretaro  constitu- 
tion, in  its  Article  27,  decrees  the  subdivision  of  'Marge  landed 
estates",  the  grant  of  commons  to  settlements  that  lack  lands, 
and  the  restitution  to  these  same  settlements  of  the  land  of  which 
they  were  despoiled  after  1856.  It  prescribes  likewise  that  the 
inhabitants  of  towns  may  enjoy  in  common  lands  that  may  thus 
have  been  assigned  to  them,  and  authorizes  the  President  to  re- 
voke all  land  concessions  granted  by  the  government  from  and 
after  the  year  1856.  It  goes  still  further  in  its  zeal  to  destroy 
everything  that  might  appear  as  large  holdings:  it  provides  that 
each  state  may  fix  the  maximum  area  of  land  which  any  indi- 
vidual, or  corporation,  may  own. 

This  is  not  the  place  to  analyze  all  these  constitutional 
provisions,  still  less  certain  laws  which  in  the  enforcement  of 
Article  27  have  been  issued  by  certain  states,  or  by  the  federal 
Congress,  including  the  "Law  of  Uncultivated  Lands"  recently 
enacted.  We  shall  confine  ourselves  to  the  statement  that  all 
of  them,  beginning  with  the  constitution,  endorse  spoliation  and 
undermine  the  economic  structure  of  the  country,  without  sub- 
stituting another,  which  may  serve  as  a  basis  for  a  new  system. 
They  are  merely  destructive  measures,  incompatible  with  the 
work  of  statesmen  which  must  be  eminently  constructive. 

With  the  apparent  purpose  of  redeeming  the  Indian,  Article 
27  begins  by  seeking  to  restore  the  communal  property  regime, 
a  system  which  quite  defeats  its  own  alleged  intention,  for  it 
tends  to  stifle  all  spirit  of  individual  progress  and  to  hold  the 


—  104  — 

native  race  down  to  the  same  degree  of  moral,  and  political, 
inferiority  in  which  it  has  lived  for  centuries.  The  reconstruction 
of  the  old  communal  settlements  will  merely  serve  to  render  the 
settlers  unfit,  to  their  own  detriment  and  to  that  of  the  general 
interest.  Under  the  regime  of  communal  ownership,  the  Indian 
is  satisfied  with  a  mere  pittance,  and  ekes  out  a  degraded  form 
of  existence.  Deprived  of  the  stimulus  and  responsibilities  of 
individual  ownership,  he  is  oblivious  of  any  concept  of  really 
human  existence  and  of  the  spur  that  makes  men  compete  in  the 
strenuous  life  or  make  way  for  the  men  who,  full  of  ambition, 
advance  on  behalf  of  civilization  and  the  most  pressing  needs 
of  mankind.  To  condemn  a  considerable  part  of  our  population 
to  this  primitive  life,  to  a  communal  existence  dating  back  to  the 
epoch  preceding  the  arrival  of  Cortes,  at  the  very  doors  of  one 
of  the  most  ambitious  and  active  peoples  who  has  been  steadily 
clearing  the  arable  land  of  Indian  tribes  and  abolishing  com- 
munal ownership;  to  render  useless  men  and  lands  when  we 
urgently  need  to  utilize  both;  to  turn  back,  declaring  ourselves 
impotent  to  coordinate  the  economic  factors  of  production  and 
satisfy  the  needs  of  the  people,  —  all  this  shows  blind  ignorance 
and  criminal  presumption,  the  work  of  reactionaries  who,  usurp- 
ing the  title  of  "progressive",  are  guilty  of  colossal  folly  when 
they  seek  to  have  us  believe  that  the  constitution  of  1917  is  an 
immense  step  forward. 

Real  progress  consists  in  finding  and  applying  the  formula 
to  redeem  the  masses  from  famine  and  anarchy,  for  which  it  is 
necessary  to  initiate  in  favor  of  the  field-laborer  an  evolutionary 
program,  which  should  be  the  outcome  of  social  action.  In  ac- 
cordance with  the  theories  prevailing  about  the  middle  of  the 
XlXth  century  and  which  inspired  the  illustrious  members  of  the 
Constitutional  Convention  and  the  reformers  of  that  epoch,  every- 
thing should  be  left  to  the  forces  of  private  initiative.  The  Indian 
is,  in  theory,  one  of  so  many  citizens,  invested  with  full  civil 
and  political  rights.  To  compel  him  to  abandon  his  communal 
ownership  so  as  to  free  him  from  his  primitive  condition,  and 
supply  him,  in  words  at  any  rate,  schools  to  teach  him  the  rudi- 
ments of  education  —  this  was  all  that  it  was  thought  the  State 
should  do  on  behalf  of  our  great  field-laboring  population. 

The  experience  of  three  generations  has  proved  that  these 
individualistic  theories  can  not  be  rigidly  applied  in  an  environ- 
ment and  with  a  people  such  as  ours.  Mexican  governments 
need  to  abandon  somewhat  the  underlying  theories  of  the  old 


—  105  — 

laws,  and,  while  respecting  the  free  display  of  individual  action, 
enter  upon  a  path  of  social  activity  which  shall  allow  them  to  be 
a  direct  factor  in  solving  the  land  problem.  But  this  action 
should  be  firmly  constructive  and  progressive,  not  reactionary  or 
destructive  as  would  result  from  the  application  of  the  consti- 
tution of  1917. 

The  task  calls  for  continued  and  sustained  effort,  and  will 
require  huge  resources  and  all  the  technical  skill  available  to 
governments.  In  the  following  conclusions  we  shall  set  forth 
the  general  lines  of  what,  in  our  judgment,  should  be  the  pro- 
gram of  governmental  action  in  this  subject. 

In  seeking  a  solution  for  the  problem  of  our  agriculture,  it 
must  be  considered  as  a  great  economic  problem  in  which  the  life  of 
Mexico  as  an  independent  nation  is  bound  up;  as  an  act  of 
humanity  toward  our  fellow-citizens,  and  as  the  most  efficacious 
means  of  transforming  the  millions  of  miserable  farm-laborers  and 
illiterates  into  active  factors  of  general  progress  and  citizens  of  the 
Republic. 

To  solve  this  problem  in  its  manifold  manifestations,  considerable 
capital  is  necessary.  Consequently,  any  policy  inimical  to  the  invest- 
ment of  capital  to  be  used  in  agriculture  and  to  activities  connected 
with  it,  violates  the  most  sacred  interests  of  the  people.  We  do  not 
mean  by  this  that  agriculture  should  be  capitalistic;  it  already  is  in 
the  social-economic  sense,  and  its  inability  to  satisfy  the  most  crying 
needs  of  the  people  is  proof  of  the  importance  of  popularizing  it; 
but  in  the  face  of  the  exigencies  of  our  environment,  this  transforma- 
tion can  only  be  effected  by  the  investment  of  new  capital.  Accord- 
ingly, we  condemn  the  precepts  contained  in  the  constitution  of  1917 
on  this  subject,  which  are  inspired  in  a  spirit  of  hostility  to  capital, 
and,  at  the  same  time,  eminently  reactionary,  since  they  advocate  a 
return  to  the  system  of  property  existing  prior  to  the  Spanish  con- 
quest and  which  prevailed  during  the  colonial  epoch.  The  provisions 
in  the  constitution  on  the  division  of  lands  are  not  feasible,  and 
would,  in  any  event,  bring  ruin  to  our  agriculture,  destroying  what 
already  exists  and  without  substituting  any  thing  better. 

It  should  not  be  thought  that  we  object  to  the  principle  that 
settlements  should  be  given  the  lands  required  for  their  municipal 
needs  and  natural  growth,  if  fair  compensation  is  made  for  those  so 
taken.  What  appears  to  us  wholly  inadmissible  is  the  creation  of 
communal  lands,  whether  by  grant  of  commons  or  by  any  other 
procedure,  which  shall  keep  the  field-laborer  under  the  perpetual 
guardianship  of  the  State,  and  kill  any  saving  ambition  he  may  ever 
have  had  to  become  an  independent  proprietor. 

In  carrying  out  the  double  purpose  of  redeeming  our  field- 
laborers  from  their  abject  condition  and  of  increasing  production, 
we  must  enlarge,  as  much  as  possible,  the  number  of  small  farm 
holdings.     Fortunately  conditions  are  favorable  to  this  step,  since, 


—  106  — 

for  the  reasons  indicated  in  the  text  of  this  chapter,  a  considerable 
number  of  large  land  owners  will  find  the  best  solution  of  their 
economic  troubles  in  the  subdivision  of  their  lands.  Possibly  a 
majority  will  find  that  this  is  the  case.  The  government  should 
encourage  this  tendency,  directly  intervening  in  the  work  of  sub- 
division. In  carrying  out  these  ends,  the  following  steps  recommend 
themselves  to  us: 

A.  That  laws  be  enacted  authorizing  individuals  or  companies 
proposing  to  subdivide  privately-owned  lands  that  are  suitable  for 
subdivision  to  issue  bonds  secured  by  the  lands  themselves  and  by 
the  additional  guarantee  of  the  Federal  Government,  provided  the 
plan  of  subdivision  complies  with  the  requisites  prescribed  by  law. 
The  law  should  establish  the  conditions  assuring  the  trustworthiness 
of  the  enterprise  and  safeguarding  the  Treasury  from  possible  losses. 

B.  That,  on  request  of  the  interested  parties,  the  government 
should  furnish,  free  of  charge,  the  technical  personnel  necessary  for 
the  subdivision  of  estates  suitable  for  parcelling  and  colonization, 
the  necessary  guarantees  that  the  lots  will  be  distributed  among  in- 
dependent farmers  being  given  to  the  government. 

C.  That  the  government  shall  proceed  to  subdivide  national 
lands  suitable  to  this  purpose  and  to  sell  the  lots  on  credit  and  at 
low  interest  rates,  subject  to  the  condition  that  these  lots  shall  not 
fall  into  the  hands  of  a  single  owner. 

The  chief  obstacle  to  be  surmounted  in  the  division  of  our 
agriculture  is  the  lack  of  irrigation.  Consequently,  we  believe  that  in 
carrying  out  any  program  of  social  action  the  Federal  Government 
should  establish  and  operate  works  for  the  control  and  use  of  run- 
ning waters. 

In  any  event  the  tracts  to  be  benefited  by  the  works  indicated 
above  should  not  exceed  in  area  the  standard  size  adopted  for  small 
holdings,  taking  into  account  the  nature  of  the  crops  suitable  to  the 
region  in  question.  The  Government  may,  of  course,  expropriate, 
with  compensation,  lands  to  be  benefited  by  irrigation,  and  sub- 
divide them  into  tracts  not  over  the  prescribed  area,  so  that  they 
may  be  sold  on  the  terms  fixed  by  law.  In  any  event,  persons  de- 
veloping lands  benefited  by  irrigation  works  executed  by  the  Gov- 
ernment ought  to  pay  the  amounts  established  in  the  respective 
schedules  for  their  water  supply. 

To  cover  the  cost  of  the  irrigation  works  to  be  carried  out  by 
the  Government,  the  latter  could  secure  the  funds  necessary  for  this 
purpose  either  by  the  issue  of  special  bonds  of  an  internal  debt  issue, 
or  by  contracting  with  banks  in  the  Republic  for  the  necessary  loans 
to  be  secured  by  the  works  themselves.  Should  the  Government 
entrust  to  private  initiative  the  building  of  certain  irrigation  works, 
it  must  grant  this  privilege  to  the  party  offering  the  most  favorable 
terms  under  conditions  prescribed  by  the  Government  itself,  to 
which  effect  it  ought  to  call  for  bids  with  proper  notice. 

We  advocate  a  revision  of  the  laws  governing  the  use  of  water  so 
that  it  may  be  enjoyed  by  private  parties  more  equitably.  We  like- 
wise demand  a  simplification  of  procedure  in  securing  water  fran- 


107 


chises  and  in  confirming  rights  to  the  enjoyment  of  waters,  so  that 
they  may  be  made  accessible  to  small  farmers.  The  Agencies  of  the 
department  of  Fomento  should  be  in  charge  of  experts  and  should 
render,  free  of  charge,  to  poor  farmers  such  technical  aid  as  they 
may  need  in  complying  with  the  requisites  laid  down  by  the  law 
in  this  regard. 

The  credit  of  the  Nation  should  be  pledged  in  the  establishment 
of  farm  loan  banks  designed  to  promote  the  interests  of  small  land 
owners,  either  by  guaranteeing  payment  of  the  capital  of  their  lands 
or  by  furnishing  them  with  loans  at  long  terms  and  low  rates  of 
interest  for  buildings,  machinery  and  farm  implements,  irrigation  works 
or  any  other  purpose  directly  connected  with  the  development  of  the 
agricultural  property.  No  agriculturist  ought  to  be  loaned  amounts 
in  excess  of  fifty  thousand  pesos  enjoying  the  guarantee  of  the  State. 

The  Federal  and  State  Governments  should  see  that  in  the  lands 
thus  subdivided  Mexican  settlers  be  established  preferentially.  We 
advocate,  however,  the  reservation  of  certain  lots  for  sale  to  foreign 
settlers  of  the  Caucasian  race  in  every  subdivision  of  land,  in  view 
of  the  influence  which  the  higher  culture  of  these  settlers  may  have 
on  the  Mexican  settlers. 

The  number  of  experimental  agricultural  stations  should  be 
adequately  increased  where  methods  of  cultivation,  stock  raising,  the 
use  of  modern  farm  implements,  chemical  fertilization,  and  other  facts 
advantageous  to  the  practical  farmer  could  be  taught  free  of  charge; 
and  equipped  with  a  corps  of  traveling  instructors  who  shall  visit 
the  various  farms  and  assist  the  farmers  as  above  provided. 

The  Federal  and  State  Governments  should  encourage  by  direct 
and  indirect  means  the  building  of  highways  and  regional  railroads 
which  shall  facilitate  communication  between  centers  of  agricultural 
production  and  centers  of  consumption.  They  should  likewise  pro- 
mote the  organization  of  cooperative  farming  associations. 

It  is  our  judgment  that  our  civil  laws,  substantive  no  less  than 
procedural,  are  inadequate  by  reason  of  their  excessive  technicalities 
in  the  development  of  small  landed  property.  Today  it  is  a  fact  that 
only  with  difficulty  can  the  ignorant  and  those  lacking  the  necessary 
funds  obtain  clear  title  of  ownership  to  their  lands.  We  cannot  in 
ine  present  document  detail  remedies  for  these  evils,  but  the  urgency 
of  the  remedies  is  so  great  that  no  time  should  be  lost  in  putting 
them  into  effect.  Our  laws  on  property  undoubtedly  satisfy  the 
exigencies  of  the  rich  or  well-to-do  classes,  but  they  are  beyond  the 
reach  of  the  poor  who  need  the  direct  protection  of  the  law  in  any 
program  of  governmental  action. 

But  if  the  laws  to  which  allusion  is  made,  are  a  handicap  to  the 
economic  development  of  the  majority  of  the  Mexican  people,  the 
fiscal  laws  have  not  been  inspired  in  any  more  liberal  spirit.  Trans- 
fers of  ownership  are  generally  taxed  excessively,  and  payment  of 
taxes  is  a  condition  precedent  to  legal  effect  of  title,  even  in  the  case 
of  inheritance.  This  condition  is  wholly  useless  from  the  point  of 
view  of  the  fiscal  interest,  since  the  Treasury  always  has  the  power 
to  compel  payment  of  taxes.     The  laws  on  land  taxation  lack  any 


108 


scientific  basis  and  the  assessment  of  lands  is  generally  excessive,  re- 
sulting in  the  concealment  of  the  real  value  by  the  tax  payer  in  his 
effort  to  evade  ruinous  rates.  As  these  concealments  are  easy  in 
large  land  holdings  and  difficult  in  the  small,  the  small  land  owner 
is  unfairly  taxed  in  comparison  with  the  large  holder.  This  unjust 
situation  calls  for  a  modification  of  our  fiscal  laws  which  shall  bring 
about  a  more  equitable  distribution  of  the  tax. 

In  view  of  the  national  need  of  increasing  the  number  of  small 
land  owners,  every  person  who  has  held  and  developed  for  three 
years  or  more  a  tract  of  national  or  public  lands  not  exceeding  300 
hectares,  should  receive,  free  of  cost,  title  thereunto. 

In  harmony  with  the  same  theory,  the  Government  ought  not 
to  alienate  in  favor  of  any  person  a  tract  of  national  or  public  land 
greater  than  300  hectareas;  but  this  rule  should  be  modified  in  the 
case  of  lands  which  cannot  be  used  except  for  stockraising  or  for 
the  cultivation  of  crops  requiring  inherently  a  larger  extent  of  land. 
But  no  person  whatever  should  receive  a  grant  of  more  than  10,000 
hectares. 

In  order  to  assure  these  small  land  settlers  against  the  dangers 
of  usury,  we  recommend  that  the  law  recognize  the  "homestead", 
not  subject  to  attachment  or  liability  for  debt. 


Lithomourtt 

Pamphlet 

Binder 

Gaylord  Bros. 

Makers 

Syracuse,  N.  Y. 

PAT.  JAN  2.1,  1908 


;s? 


